18/11/2011 (The Star) - TSH Resources Bhd (TSH) posted an 89% jump in its third-quarter net profit to RM34.5mil versus a year earlier on a 27% higher revenue of RM273.1mil.

The net profit, however, was slightly lower compared with the preceding quarter’s RM36mil. Revenue was also lower by 17.2% from RM330mil in the second quarter.

The company told Bursa Malaysia yesterday that the increase in net profit was due to higher crop production arising mainly from higher yield and an increase in mature plantation field in Indonesia. It also partly attributed the rise to its mill operations, which continue to show high efficiency.

“We achieved record FFB (fresh fruit bunches) yield during the third quarter for both our Sabah and Indonesian estates”, said chairman Datuk Kelvin Tan.

Its cocoa manufacturing segment reported a lower profit due to lower production and unfavourable cocoa butter price, while in the wood products segment, the increased loss was attributable to the decline in sales volume and gross margin and downsizing of overseas operations.

“Our year-to-date profit has already exceeded the full-year profit forecast of analysts. Hence, this will be a very rewarding year for the company,” Tan said. “Consequently, the board has decided to reward shareholders with a 1:1 bonus share.”

On its prospects, the company said despite the limits to the upside of crude palm oil (CPO) prices, due to macroeconomic developments in Europe and the United States, there was fundamental demand for the crop due to its inherent competitiveness.

“With the palm oil prices maintaining at current level and with increased hectarage coming into maturity, the group is expected to achieve a satisfactory level of profitability,” TSH said.

The company said it was exploring opportunities in South Asia for its wood products segment and aimed to win more local installation projects to turn the segment around.

TSH also said it faced very competitive business conditions in cocoa manufacturing due to the high Indonesian bean prices because of export taxes and the increase in the cost of grinding.

“The cocoa manufacturing segment’s performance in the coming months will continue to be challenged by the volatile demand and supply of its finished products in the global market,” it said.