KUCHING: Ta Ann Holdings Bhd has posted an impressive group net profit of RM183.6 million for the financial year ended December 31,2024 (FY2024) from RM157.3 million in FY2023.
It amounts to an increase of RM26.3 million despite a drop in revenue to RM1.65 billion from RM1.68 billion.
The higher earnings were largely attributed to the recognition of a gain in the fair value of the biological assets amounting to RM40.92 million in 2024 compared to a loss of RM14.47 million in 2023.
The company’s earnings per share rose to 41.69sen from 35.7sen.Ta Ann has declared higher dividends of 35sen per share for FY2024, up 10sen from 25sen per share in 2023.
For financial year under review,Ta Ann’s oil palm segment generated higher revenue of about RM1.45 billion (FY2023:RM1.37 billion),driving up the segment’s pre-tax profit to RM303 million (RM264.5 million).
However,its timber products segment delivered dismal results,with revenue plunging to RM196.8 million (RM310.3 million),resulting in the segment to fall into the red with a pre-tax loss of RM26.41 million (+RM26.46 million).
The other segment improved its revenue to RM3.45 million (RM2.62 million),pushing up pre-tax profit to RM1.45 million (RM804,000).
Year-on-year,Ta Ann blamed the drop in group revenue to RM1.65 billion (FY2023:RM1.68 billion) and pre-tax profit to RM278.1 million (RM291.8 million) to decreased export volume of logs and plywood products by 45 per cent and 25 per cent respectively that coincided with the weakening commodities’ selling prices,as the selling price for export logs and plywood products fell by 11 per cent and 12 per cent respectively,thus impacting earnings.
“The group had recognised a gain from the changes in the fair value of the biolopgical assets amounting to RM40.92 million in 2024 compared to a loss of RM16.47 million in 2023,” the company said in explanatory notes to its financial results.
In 4Q2024,Ta Ann had reported improved earnings,with group net profit expanded to RM17.35 million (4Q2023:RM9.86 million) in line with increased revenue to RM463.1 million (RM455.7 million).
On the pre-tax profit level,4Q2024 reported lower numbers of RM61.9 million (RM73.5 million) due mainly to lower sales volume for plywood products and export logs by 51 percent and 17 percent respectively.
“The group had recognised the asset impairment of assets for Smithton mill located in Tasmania, Australia that amounted to A$5.7 million or the equivalent of RM17 million.
“The provision for the asset impairment is deemed appropriate in view of the weak performance. Therefore, a record of RM17.19 million of impairment was being reported in the quarter under review.
“The group had recognised a gain of RM0.38 million from the changes in the fair value of the biological assets during the current quarter under review compared to a loss of RM32.77 million in the preceding corresponding quarter,” said Ta Ann.
The 4Q2024 financial results came in weaker compared to that of the immediate preceding quarter (3Q2024) when revenue was higher at RM467.6 million (4Q2024:RM463.1 million) and pre-tax profit stood at RM105.1 million (RM61.9 million).
“The performance in the current quarter was mainly affected by the lower sales volume for export log and plywood products by 29% and 22% respectively.”
Commenting on prospects for FY2025,Ta Ann said adverse weather conditions from late 2024 to the present have significantly impacted the group’s upstream production and downstream processing operations.
Nevertheless,there are signs of recovery in the key markets of the group.
“For the timber market,Japan’s plywood inventory has reached a historical low,signalling the market commodity have reached its bottom.A potential rebound is on the horizon that could drive the demand and pushing for price improvement.
“In the oil palm sector,severe wet weather has led to widespread flooding in Sarawak,particularly affecting the peat estates.As a result,crude palm oil (CPO) production is expected to decline further,especially during this low crop period.
“However, the global supply constraints that were caused by the climate change are likely to push for CPO price growth,” added the company.
Ta Ann said in 2025,the implementation of a higher minimum wage and additional statutory compliance costs would inevitably raise the production expenses.
To counter these cost pressures, it said the group remains committed to efficient resource management and workforce optimisation.
“By maintaining a stable workforce and focusing on sustainability-driven operational efficienceiss,the group aims to sustain its competitiveness and profitability.
“Barring any unforseen circumstances,the board of directors anticipates a satisfactory financial performance for the next financial year,” predicts Ta Ann.
Meanwhile,Ta Ann has redesignated its group managing director and chief executive director (CEO) Dato Wong Kuo Hea,73,to executive group managing director,effective April 1,2025.
The company has appointed Kuo Hea’s son Wong Siik Onn,49,as executive deputy group managing director.
Siik Onn graduated from University of Western Australia with a degree in electrical & electronic engineering.He also has Masters in business administration from Curtin University,Australia,and Masters in computer science from University of Ken,United Kingdom.
Ta Ann also redesignated its executive director Sa’id Dolah,63,as deputy chairman and Akmal Haqqani Zainol Rashid,35,as CEO,both effective also on April 1.
Sa’id,a a degree holder in civil engineering (Hons) from Unversiti Malaya and Masters in business administration from Edith Cowan University,Australia,is the brother of Dato Sri Wahab Dolah,a major shareholder of Ta Ann.
Akmal, who holds a Bachelor of Science (Hons) in civil engineering from UCSI University, Malaysia, joined Ta Ann group in 2021 as the chief operating officer for the oil palm plantation division. He is the nephew of Ta Ann’s executive chairman Datuk Amar Abdul Hamed Sepawi.
