Published on: Thursday, May 28, 2015
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Kuala Lumpur: TH PLantations Bhd's pre-tax profit fell to RM320,000 for its first quarter ended March 31, 2015 from RM12.01 million in the same quarter last year.
Revenue dropped to RM82.3 million from RM124.24 million previously.
"The prolonged dry weather in the first half of last year and the adverse wet weather at the end of 2014 have brought upon deeper effects on production than initially expected," Chief Executive Officer and Executive Director Datuk Zainal Azwar Zainal Aminuddin said.
In addition, commodity prices continued to remain subdued, further impacting the overall earnings of the Group, he said in a statement Wednesday.
For the quarter under review, TH Plantation recorded Fresh Fruit Bunches production of 137,988 metric tonnes, translating into a 20 per cent decline from the same period last year.
Crude palm oil (CPO) production declined by 22 per cent to 31,052 metric tonnes.
Its average realised prices for CPO for the quarter was RM2,162 per metric tonne versus RM2,507 per metic tonne in the corresponding quarter last year.
"The Group's production was further impacted by the large proportion of younger estates, which yield lower FFBs compared with prime mature estates," he said.
Nevertheless, the Group's production showed signs of recovery towards the end of the first quarter of 2015 and the Group is cautiously optimistic that production will continue to build up in subsequent quarters.
Although production is now showing signs of recovery, the company does not discount the possibility of El Niño materialising in the coming months, he said.
"We are already observing intense weather changes in some parts of the world, which may be strong indicators of the El Niño phenomenon.
"The El Niño phenomenon is not to be taken lightly compared to other normal weather anomalies, as the effects can be substantial, particularly on crop production levels in the immediate, medium and longer terms," said Zainal Azwar.
Despite the headwinds faced by the palm oil sector currently, the group is confident that the long-term fundamentals of the industry remain intact, and that the demand for palm oil would grow in tandem with the growth of the world population. – Bernama
The group, he said, was focused on cultivating growth and setting the stage to benefit from the higher demand for palm oil with its enlarged land bank. – Bernama
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