KUCHING: Subur Tiasa Holdings Bhd group has reported stronger net profit of RM4.76 million in third quarter to September 30,2024 (3Q2024) from about RM1.1 million a year ago, bolstered by the improved performance of its oil palm business. This was despite a drop in group revenue to RM111.75 million from RM128.36 million in 3Q2023.
Company’s earnings per share rose to 2.53sen from 0.58sen. In 3Q2024, Subur Tiasa’s oil palm segment posted impressive pre-tax profit of RM16.44 million (3Q2023:RM5.37 million) despite a one per cent drop in revenue to RM70.97 million (RM71.95 million).
The company attributed the strong earnings to a five per cent increase in crude palm oil (CPO) price to RM3,814 per tonne from RM3,993 per tonne in 3Q2023.
On the other hand, the group’s timber segment reported worsening results as its pre-tax profit widened to RM8.78 million (- RM3.01 million) as revenue shrank substantially to RM33.64 million (RM49.17 million) or down by 32 per cent.
The timber segment is involved in extraction and sale of logs, subcontractor for tree planting (reforestation) and manufacturing and trading of plywood, veneer, raw and laminated particleboard, sawn timber, finger-joint moulding and charcoal.
The others segment fell into the red, with pre-tax loss of RM1.19 million, a reversal from pre-tax profit of RM68,000 in 3Q2023 as revenue decreased to RM7.14 million from RM7.25 million.
The others segment is engaged in provision of towage and transportation services, insurance services, property holding and development, manufacturing and trading of drinking water, manufacturing and trading of pipes, repair and maintenance of motor vehicles and trading of industrial, commercial and agriculture vehicles.
The 3Q2024 financial results were much improvement compared to the immediate preceding quarter (2Q2024) as group pre-tax profit jumped to RM6.47 million (2Q2024:RM139,000) in line with revenue growth to RM111.75 million (RM100.34 million).
“Oil palm segment’s revenue increased by 25 per cent to RM71 million and reported higher pretax profit of RM16.4 million mainly due to fresh fruit bunches (FFB) production volume increased by 26 per cent to 94,100MT,” Subur said in explanatory notes to its financial results.
The timber segment reported dismay results as its pre-tax loss worsened to RM8.78 million from RM3.02 million as revenue fell to RM33.64 million from RM36.72 million recorded in 2Q2024.
Subur Tiasa blamed the poor performance to lower selling price and production of logs in 3Q2024.
The others segment also did poorly with pre-tax loss of RM1.19 million, a reversal from pre-tax profit of RM648,000 in 2Q2024 despite increased revenue to RM7.14 million from RM6.53 million.
In the January-September 2024 period (9m2024), Subur Tiasa managed to substantially cut its group net loss to RM1.41 million (9m2023:-RM18 million) although revenue fell to RM315.44 million (RM346.87 million).
The oil palm segment recorded a turnaround with pre-tax profit of RM18.27 million from loss of RM12.1 million in 9m2023 in line with a seven per cent revenue growth to RM182 million from RM169.7 million, “Year-on-year revenue increased by RM12.3 million to RM182 million and reported turnaround of RM18.3 million pre-tax profit due to (i) 4 per cent increase in CPO price from RM3,863/MT to RM4,002/MT and (ii) 0.3 per cent increase in FFB sales volume from 240,678 MT to 241,477 MT,” said Subur Tiasa.
However, the higher earnings of the oil palm segment was offset by widened pre-tax loss of RM17.65 million (9m2023:- RM6.12 million) reported by the timber segment, which saw its revenue slipped to RM113.67 million (RM160.6 million).
Subur Tiasa attributed the worsening results of the timber segment to lower selling prices of logs and higher operating costs. The other segment lost more money as its pre-tax loss increased to about RM1.8 million (-RM791,000) despite increase in revenue to RM19.76 million (RM16.61 million).
Commenting on prospects, Subur Tiasa said the group anticipates strong performance in the oil palm segment for 4Q2024, supported by favourable CPO price trends.”
Key drivers include tightening global supply, reduced stock levels and Indonesia’s implementation of the B40 biodiesel mandate in January 2025, which is expected to boost demand by an additional two million tonnes annually.
“CPO prices are projected to remain elevated, bolstered by reduced production in Malaysia and Indonesia, compounded by potential weather-related disruptions, such as the anticipated La Nina event, which could further limit yields.
“The group is well positioned to capitalise on these favourable market dynamics through costefficiency measures and optimised operations,” added the company.
