KUCHING: Subur Tiasa Holdings Bhd has slipped into the red with group net loss of RM15 million in financial year to Dec 31, 2023 (FY2023) from profit of RM46.3 million in FY2022 due to the dismal performance of the timber business and sharply lower earnings from the oil palm business.
Year-on-year, group revenue fell to RM464.8 million from RM585 million in FY2022 or down by RM120.2 million or more than 20 per cent.
The company reported losses per share of 7.97 sen from earnings per share of 24.61 sen previously.
In FY2023, the oil palm segment posted substantial lower revenue of RM235.9 million (FY2022: RM330.3 million), pulling down its pre-tax profit to RM3.54 million (RM76.9 million) .
The timber segment also reported decreased revenue to RM207.2 million (RM240.9 million) and widened its pre-tax loss to RM9.22 million (-RM1.2 million) but the others segment improved its performance with significantly higher revenue of RM21.77 million (RM13.77 million) and returned to the black with pre-tax profit of RM239, 000 (-RM7.52 million).
The others segment is involved in the 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 agricultural vehicles.
Subur Tiasa blamed the drop in the revenue and earnings of the oil palm segment in FY2023 to a 23 per cent decline in the price of crude palm oil (CPO) to RM3,807 per tonne from RM4,960 per tonne in FY2022, coupled with a two per cent decrease in the sales volume of fresh fruit bunches (FFB) to 339,671 tonnes from 345,488 tonnes.
“Lower FFB sales volume (was recorded) as some of the estates were affected by flooding in the first quarter of the year (2023) while lower pre-tax profit was mainly due to lower FFB price and higher fertiliser costs,” the company said in explanatory notes to its financial results.
Reviewing the performance of the timber segment, Subur Tiasa said the bottomline in FY2023 was affected because of the lower sales volume of logs and timber panels.
The timber segment recorded pre-tax loss of RM9.2 million in FY2023 due to impairment provision on property, plant and equipment. The timber businesses cover log harvesting and sales, subcontractor for reforestation projects, manufacturing and trading of plywood, veneer, raw and laminated particleboard, sawn timber, finger-joint moulding and charcoal for its manufacturing activities.
In 4Q2023, Subur Tiasa reported improved earnings with group net profit rose to RM3 million (4Q2022: RM1.83 million) despite lower turnover of RM118 million (RM128 million).
Quarter-on-quarter, the pre-tax profit increased by RM5.7 million while revenue dropped by RM1 million due to a five per cent jump in FFB sales volume from 94,450 tonnes to 98,993 tonnes despite a six per cent drop in CPO price from RM3,913 per tonne to RM3,670 per tonne.
The timber segment’s performance was affected by lower sales volume of logs and timber panels.
The 4Q2023 financial results came in stronger than the immediate preceding quarter despite reduced revenue. Pre-tax profit in 4Q2023 jumped to RM13.53 million (3Q2023: RM2.43 million) on lower revenue of RM118 million (RM128.4 million).
The oil palm segment reported higher pre-tax profit of RM15.6 million (3Q2023: RM5.37 million) due to lower operating costs while the marginally higher pre-tax loss of the timber segment at RM3.1 million (-RM3 million) was due to impairment on property, plant and equipment.
Commenting on prospects, Subur Tiasa expects the CPO price to range between RM3,900 and RM4,000 per tonne for 1Q2024 in anticipation of the low crop season.
“CPO price is expected to reach RM4,200 per tonne for the first half of 2014 on the back of seasonal decline in FFB output while demand for CPO remains resilient in line with the upcoming Ramadan demand.
“The group remains steadfast and resilient in its endeavours by reinforcing cost-rationalisation initiatives while concurrently optimising business operations through systematic enhancements in process flow,” added Subur Tiasa.
