KUCHING: Ta Ann Holdings Bhd group profit has plunged by more than 50 per cent (pct) to RM156.4 million in financial year ended Dec 31, 2023 (FY2023) from RM320.5 million in FY2022 due to lower average selling prices of crude palm oil (CPO), fresh fruit bunches (FFB) and plywood products as well as higher loss from the changes in the fair value of the biological assets.
The substantial decrease in earnings was in line with the sharp drop in revenue to RM1.68 billion from RM2.19 billion recorded in FY2022. This has impacted earnings per share which shrank to 35.51sen from 72.76sen. In 4Q2023, Ta Ann posted lower group net profit of RM9 million (4Q2022:RM22.34 million) as revenue fell to RM455.7 million (RM450.7 million).
“The variation in performance was mainly attributed to the weakening average selling price of plywood products, CPO and FFB by 27 pct, 8 pct and 8 pct respectively despite higher sales volume for plywood products and CPO by 75 pct and 6 pct respectively.
“The group had recognised a loss of RM32.77 million from the changes in the fair value of the biological assets during the current quarter under review as compared to a loss of RM22.75 million in the preceding corresponding quarter,” the company said in explanatory notes to its financial results.
The Q42023 financial results were weaker as compared to the immediate preceding quarter (3Q2023) because of the lower sales volume and sale prices of logs and FFB.
“The group recorded a revenue and profit before tax of RM455.72 million and RM83.91 million respectively in the quarter under review as compared to RM489.19 million and RM103.29 million respectively in the preceding quarter. “Lower sales volume for export logs and FFB by 51 pct and 7 pct respectively that coincided with the lower selling price for export logs and FFB by 15 pct and 5 pct respectively accounted for the decrease in profitability,” explained Ta Ann.
On a yearly performance, Ta Ann said group revenue fell to RM1.68 billion in FY2023 (FY2022:RM2.19 billion) and pre-tax profit slumped to RM302.2 million (RM552 million) due to the lower average selling price recorded for the CPO, FFB and plywood products by 26 pct, 27 pct and 21 pct respectively.
The group had recognised higher losses from the changes in the fair value of biological assets to RM16.47 million (RM9.31 million). Commenting on prospects for the new financial year, Ta Ann said the group anticipates the global supply of the commodities’ products would not expand due to greater emphasis on environmental compliances.
However, it said demand for most commodities remain stable, thus posting a positive outlook on commodities’ prices. Meanwhile, CPO prices movement, it said, has recently shown in a more positive sentiment.
“With sufficient manpower and the group’s continuous focus on good agriculture practice in its oil palm operations, it is expected to achieve a higher FFB production.
“Barring any unforeseen circumstances, the board of directors anticipates to achieve a satisfactory performance for 2024,” added the company. Meanwhile, Asteel Group Bhd has reported widening group net loss of RM6.8 million in FY2023 from RM5.9 million in FY2022 as revenue fell to RM253.3 million from RM276.7 million. Losses per share increased to 1.4sen from 1.31sen. In 4Q2023, Asteel posted higher group net loss of RM3.37 million (4Q2022:-RM2.24 million) on lower sales of RM69 million (RM74.3 million).
The company blamed the weak market sentiment and competition from imported materials to the RM5.3 million drop in group revenue in 4Q2023. The 4Q2023 results also came in weaker as compared to 3Q2023 when Astell recorded lower group net loss of RM2.89 million on revenue of RM65.7 million. However, revenue in 4Q2023 expanded by RM3.37 million to RM69 million, with contribution from projects and improved sales of products. On prospects, Asteel said as the country’s economy is poised toward positive recovery in 2024,this will augur well for property and construction sectors, thereby expecting the group to deliver favourable results for FY2024 on these positive factors.
