KUCHING: Higher average selling prices of fresh fruit bunches (FFB), crude palm oil (CPO), and palm kernel (PK) have significantly lifted Jaya Tiasa Holdings Bhd’s group net profit to RM74.5 million in the second quarter ended December 31, 2024 (2Q2024), from RM48.22 million in 2Q2023 — an increase of RM26.3 million (+55 per cent).
During the same period, group revenue surged by 16 per cent to RM387.4 million from RM333.5 million. The company’s earnings per share rose to 7.7 sen from 4.98 sen previously.
Besides the oil palm business, Jaya Tiasa also recorded improved performance in its timber business.
In the current quarter under review, Jaya Tiasa’s oil palm segment generated a 15 per cent increase in revenue to RM368.1 million (2Q2023: RM318.8 million), while the timber segment contributed a higher turnover of RM18.97 million (RM14.18 million), up by 34 per cent. The others segment, however, reported lower revenue of RM370,000 (RM432,000).
In tandem with higher revenue, the oil palm segment posted a nine per cent jump in pre-tax profit to RM108.53 million (RM99.8 million), whereas the timber segment substantially reduced its pre-tax loss to RM5.96 million (-RM32.82 million). The others segment, however, widened its pre-tax loss to RM1.29 million (-RM107,000).
Jaya Tiasa attributed the revenue expansion in the current quarter to higher average selling prices of CPO and PK, which rose by 17 per cent and 47 per cent, respectively. These price hikes more than compensated for the decrease in sales volume of both CPO and PK.
Compared to the immediate preceding quarter (1Q2024), Jaya Tiasa posted firmer earnings, as its revenue soared by 43 per cent to RM387.4 million (RM271.7 million) and group net profit improved by three per cent to RM74.53 million (RM72.31 million).
Quarter-on-quarter, the oil palm segment’s revenue shot up by 45 per cent to RM368.1 million (RM253.4 million), while the timber segment’s turnover increased by six per cent to RM18.97 million (RM17.86 million). However, the higher revenue in the oil palm segment did not translate into higher earnings, as its pre-tax profit slipped by five per cent to RM108.9 million (RM111.1 million). The timber segment managed to reduce its pre-tax loss by 50 per cent to RM5.96 million (-RM11.82 million). The others segment also cut its pre-tax loss by 34 per cent to RM1.29 million (-RM1.93 million).
“The group’s revenue for the current quarter increased by 43 per cent compared to the immediate preceding quarter, primarily due to a 14 per cent and 27 per cent increase in the average selling prices of CPO and PK, respectively. Additionally, there was a 34 per cent increase in the sales volume of CPO during the quarter.
“However, the oil palm division’s contribution to the group’s pre-tax profit declined by five per cent due to a lower profit margin, resulting from reduced FFB production and higher FFB unit production costs, including increased fertiliser application and higher windfall levy payments,” the company explained.
For the six-month period in 2024, Jaya Tiasa delivered strong earnings, with group net profit jumping to RM146.8 million (6M2023: RM115.1 million), while revenue surged to RM659.1 million (RM581.5 million).
Jaya Tiasa attributed its strong performance to several factors, including improved profit margins from higher average selling prices of FFB, CPO, and PK, as well as lower fair value loss in biological assets recognised during the current financial period.
Commenting on future prospects, Jaya Tiasa said that CPO prices are expected to remain moderately supported due to higher CPO consumption driven by the ongoing diesel mandate in major producing countries, lower CPO production during off-peak seasons, and lingering effects of unfavourable weather conditions.
However, it noted that the demand rationalisation initiative undertaken by major edible oil-consuming countries, due to palm oil’s prevailing price premium over other edible oils, may exert downward pressure on CPO prices.
“Amidst global economic uncertainties and challenges, the group is focusing on stringent cost management and operational efficiency to preserve profitability and competitiveness.
“Barring any unforeseen circumstances, the group anticipates satisfactory financial performance for the second half of the current financial year,” it added.
