KUALA LUMPUR (May 22): TSH Resources Bhd’s net profit fell 64.45% to RM29.43 million for the first quarter ended March 31, 2023 (1QFY2023), from RM96.48 million a year earlier, amid a lower revenue.

The lower earnings were also due to a loss reported by a joint venture as opposed to a gain in 1QFY2022, as well as lower gains on disposal of assets amounting to RM27.6 million, compared with RM53.23 million previously.

Earnings per share shrank to 2.13 sen from 6.99 sen, the oil palm plantation group’s bourse filing showed.

Revenue fell 25.8% to RM250.30 million from RM337.35 million in 1QFY2022, due to a decline in revenue contributions from the palm products segment, attributable to lower crude palm oil (CPO) and palm kernel oil prices despite higher volume sold.

The company noted that the average CPO price was RM3,555 per tonne in the January-March 2023 quarter, compared with RM4,779 a year prior, representing a decline of 26%.

As for palm kernel oil, the average selling price dropped even more sharply by 55% to RM1,770 per tonne, from RM3,950 a year earlier.

TSH Resources’ fresh fruit bunches (FFB) production during the quarter totalled 199,334 tonnes, up marginally by 1% from 197,947 tonnes last year.

The group said CPO prices have been downtrending since May, and is currently hovering at around RM3,700 per tonne.

However, it noted that the direction of CPO prices for the rest of the year will depend on how various influencing factors pan out.

For example, the Indonesian government announced that it will gradually ease palm oil domestic sales rules, which will allow more export of palm oil, and thus potentially lowering CPO prices.

“On the other hand, weather-related phenomenon such as El Nino may also impact edible oil supplies and prices, depending on the severity and timing of such occurrences,” the group added.

Underpinned by its strong financial position, TSH Resources said it will strive to progressively increase the planted hectarage to maintain production growth.

Shares of TSH Resources closed unchanged at RM1.02 on Monday (May 22), giving the group a market capitalisation of RM1.41 billion. Over the past one year, the stock has depreciated by 30% from RM1.45.