KUCHING: Subur Tiasa Holdings Bhd has returned to profitability, recording group net profit of RM1 million in second quarter to June 30, 2024 (2Q2024) from loss of RM11.87 million a year ago, with the turnaround of its oil palm business.
The profit was reported despite group revenue had dropped to RM100.3 million from RM116.5 million in 2Q2023.
The company registered earnings per share of 0.54 sen from losses per share of 6.3 sen.
In the current quarter under review, Subur Tiasa derived RM56.82 million revenue from its oil palm segment (2Q2023: RM52.48 million), RM36.72 million from timber segment (RM59.72 million) and RM6.75 million from the others segment (RM4.3 million).
The oil palm segment posted pre-tax profit of RM2.51 million (-RM11.16 million), timber segment incurred pre-tax loss of RM3.02 million (-RM1.93 million) and others segment registered pre-tax profit of RM648,000 (-RM75,000).
The oil palm segment is involved in the cultivation of oil palm and sales of fresh fruit bunches (FFB).
The timber segment is engaged in the extraction and sales of logs, subcontractor for tree planting (reforestation), manufacturing and trading of plywood, veneer, raw and laminated particleboard, sawn timber, finger-joint mouldings and charcoal for its manufacturing activities.
The others segment’s business include provision of towage and transportation services, insurance services, property holding and development, manufacturing and trading of drinking water and pipes, repair and maintenance of motor vehicles and trading of commercial and agriculture vehicles,
“Quarter-on-quarter, the oil palm revenue increased by RM4.4 million to RM56.9 million (2Q2024) and reported turnaround of RM2.5 million pre-tax profit mainly due to 5% increase in crude palm oil (CPO) price from RM3,851/MT to RM4,041/MT.
“Year-on-year, oil palm revenue increased by RM13.3 million to RM111 million and reported turnaround of RM1.8 million pre-tax profit mainly due to 2% increase in CPO price from RM3,925/MT to RM4,008/MT, and 7% increase in fresh fruit bunches (FFB) sales volume from 137,314 MT to 147,376 MT,” Subur Tiasa said.
For the timber segment, the company said its revenue in 1H2024 fell by 28 per cent to RM80.03 million (1H2023: RM111.41 million), resulting in worsening pre-tax loss to RM8.87 million (- RM3.11 million) because of lower sales volume of logs and timber panels as well as lower selling prices of logs in the current financial period.
In the immediate preceding quarter (1Q2024), Subur Tiasa recorded marginally higher group revenue of RM103.34 million (2Q2024: RM100.34 million) and returned to profitability with pre-tax profit of RM139,000 ( -RM7.79 million).
“Oil palm segment’s revenue increased by 5% to RM56.9 million (1Q2024: RM54.17 million) and reported turnaround of RM2.5 million pre-tax profit (pre-tax loss RM680,000) mainly due to FFB production volume increased by 2% to 74,596 MT and CPO price improved to RM4,041/MT,” said the company.
Subur Tiasa attributed the 15 per cent drop in timber revenue to RM36.72 million in 2Q2024 (1Q2024: RM43.31 million) due to lower logs’ selling price. But the segment pre-tax loss was reduced to RM3.02 million (-RM5.86 million).
In the January-June 2024 period (1H2024), Subur Tiasa group managed to sharply reduce its group net loss to RM6.17 million (1H2023: -RM19.11 million) despite revenue plummeting to RM203.7 million (RM218.5 million).
Commenting on prospects, Subur Tiasa said the CPO price is anticipated to maintain a strong position in the upcoming
quarter, driven by several key factors.
“Recent market trends indicate a tightening supply situation due to a projected decrease in production from major producers, like Indonesia. Additionally, the ongoing geopolitical tensions and the El Nino weather phenomenon are expected to further limit global palm oil supply, potentially pushing prices upward.”
Subur Tiasa said the positive sentiment surrounding CPO prices is likely to bolster the performance of the group’s oil palm segment, which is poised to continue contributing positively to the group’s overall results, especially as the peak crop season approaches.
