MARKET DEVELOPMENT
TSH Posts RM26.4mil in Q2 Core Operating Profit
TSH Posts RM26.4mil in Q2 Core Operating Profit
27/08/2015 (The Star) - Sabah-based plantation company TSH Resources Bhd posted a lower core operating profit at RM26.4mil for the second quarter ended June 30, 2015 compared with RM51mil in the corresponding quarter last year.
During the quarter under review, the group reported a revenue of RM206mil compared with RM302mil previously.
The core profit was derived after adjusting for non-cash and unrealised foreign exchange translation gain or loss to enable a fair comparison, TSH said in a statement.
In the first half of financial year ended June 30, 2015, the company recorded core operating profit of RM57.8mil.
According to TSH, the average crude palm oil (CPO) price was lower at RM2,107 per tonne in the second quarter of 2015 against RM2,463 per tonne in the same quarter last year.
It noted that the CPO market price was affected by strong supply of oilseeds, especially soybean.
The laggard impact of severe dry weather in Kalimantan during the third quarter of 2014 had impacted the company’s fresh fruit bunches (FFB) production for second-quarter 2015.
The dry spell also did not happen or was not as severe in Peninsular Malaysia, Sabah and Sumatra last year. Hence, the FFB production of those areas was either minimally or not affected at all.
On the other hand, the fundamentals of CPO are strong in the world edible oil market, evidenced by the fact that it is the most consumed edible oil in the world. The cost structure of CPO production is also internationally competitive.
Furthermore, the recent biodiesel mandates by both Malaysian and Indonesian government to increase the blending rate of palm oil in biodiesel should augur well for better demand and the longer-term prospect of CPO price.
Hence, TSH board of directors remain optimistic with the long-term outlook of the palm oil industry. Nevertheless, the company will strive to raise productivity and control costs to improve its competitiveness.
The company’s FFB production is expected to improve towards the later part of this year.
During the quarter under review, the group reported a revenue of RM206mil compared with RM302mil previously.
The core profit was derived after adjusting for non-cash and unrealised foreign exchange translation gain or loss to enable a fair comparison, TSH said in a statement.
In the first half of financial year ended June 30, 2015, the company recorded core operating profit of RM57.8mil.
According to TSH, the average crude palm oil (CPO) price was lower at RM2,107 per tonne in the second quarter of 2015 against RM2,463 per tonne in the same quarter last year.
It noted that the CPO market price was affected by strong supply of oilseeds, especially soybean.
The laggard impact of severe dry weather in Kalimantan during the third quarter of 2014 had impacted the company’s fresh fruit bunches (FFB) production for second-quarter 2015.
The dry spell also did not happen or was not as severe in Peninsular Malaysia, Sabah and Sumatra last year. Hence, the FFB production of those areas was either minimally or not affected at all.
On the other hand, the fundamentals of CPO are strong in the world edible oil market, evidenced by the fact that it is the most consumed edible oil in the world. The cost structure of CPO production is also internationally competitive.
Furthermore, the recent biodiesel mandates by both Malaysian and Indonesian government to increase the blending rate of palm oil in biodiesel should augur well for better demand and the longer-term prospect of CPO price.
Hence, TSH board of directors remain optimistic with the long-term outlook of the palm oil industry. Nevertheless, the company will strive to raise productivity and control costs to improve its competitiveness.
The company’s FFB production is expected to improve towards the later part of this year.