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 TSH (9059) TSH RESOURCES BHD 3Q net profit jumps on higher CPO and PK prices

KUALA LUMPUR (Nov 18): TSH Resources Bhd saw its third quarter ended Sept 30, 2020 (3QFY20) net profit skyrocket by nearly 300% following higher crude palm oil (CPO) and palm kernel (PK) prices.

In a bourse filing, the planter announced that its latest quarterly net profit stood at RM24.07 million, from RM6.03 million in the corresponding quarter last financial year.

Quarterly earnings per share (EPS) now stand higher at 1.74 sen from 0.44 sen posted in 3QFY19. This now brings cumulative EPS for the nine months ended Sept 30, 2020 (9MFY20) to 3.34 sen from 1.86 sen in the corresponding nine months last financial year.

3QFY20 revenue was up by 7.21% at RM194.17 million from RM181.12 million recorded in the previous corresponding financial quarter.

It noted that average CPO prices in 3QFY20 were RM2,404 per tonne versus the RM1,920 posted in 3QFY19. As for its fresh fruit bunch (FFB) production, it achieved 177,476 tonnes, down from the 188,991 tonnes seen a year prior. The decline in FFB production in 3QFY20 was primarily due to the lagged impact of the drought in Indonesia in 3QFY19. TSH expects production to normalise in 4QFY20.

As a result of higher commodity prices, its palm oil products segmental profit increased by 53.3% to RM32.5 million from RM21.2 million in 3QFY19.

TSH's net profit and revenue also increased on a quarterly basis. The group saw its 3QFY20 net profit increase by 21.45% from RM19.82 million in 2QFY20. Quarterly revenue was down by 7.79% from RM210.57 million.

9MFY20 net profit is now 80.05% higher at RM46.14 million from the RM25.63 million seen in 9MFY19. Revenue for its most recent nine-month period was up 11.97% at RM586.43 million from RM523.76 million in the corresponding nine months last financial year.

On its prospects, TSH noted that palm oil prices have recovered since their May low following tight supply demand dynamics and higher soybean oil prices.

“Despite the increase in CPO price in recent months, we remain cautious amidst the uncertainty caused by Covid-19 pandemic and its consequential impact on demand

"The board remains optimistic on the long-term prospect of the palm oil industry. Global population and per capita income growth, as well as the many health qualities of palm oil, are expected to drive greater demand for palm products. This augurs well for the group as palm products segment, which accounts for approximately 86% of the revenue for the group, will remain the core contributor to the group profit,” it said.

Shares in TSH finished unchanged at RM1.10, yielding a market capitalisation of RM1.52 billion. It saw 2.74 million shares transacted.


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