KUCHING: Subur Tiasa Holdings Bhd anticipates the prices of logs and timber products to be sustained going forward.
Its expectation is based on lower production and tight supply of logs.
In the first quarter ended Oct 31, 2018 (1Q-2018), Subur Tiasa’s timber segment recorded revenue of about RM52.6 million, which was an increase of 23 per cent from the preceding quarter due to higher export sales volume of plywood and
particleboard.
However, the 1Q-2018 revenue was 32 per cent lower against RM77.3 million recorded in 1Q-2017. The company managed to narrow pre-tax loss of the timber segment to RM4.2 million from RM10.7 million during the same period, thanks to improved average selling prices of logs and timber products.
The timber business remained the key contributor and generated over 60 per cent of Subur Tiasa group’s turnover of RM86.9 million in 1Q-2018. The oil palm segment chipped in RM32.8 million, which was flat as compared to similar figure in 1Q-2017.
The oil palm segment made a pre-tax profit of about RM6.5 million, which was lower than RM13 million in 1Q-2017 due to falling average selling price of fresh fruit bunches (FFB) although sales volume increased brought about by higher yield per hectare.
The profit of the oil palm business helped to offset the loss of RM4.2 million incurred by the timber segment in the quarter under review. The group managed to turn in pre-tax profit of RM500,000 which was lower than RM796,000 in 1Q-2017.
“Crude palm oil (CPO) price is expected to recover from current low price in the light of mandatory implementation of B10 diesel on Feb 1,2019.
“The oil palm plantation segment performance would continue to contribute positively to the group driven by the improvement FFB yield, oil extraction rate and operational efficiency,” Subur said in notes to its latest quarterly results released last Friday.
In first half-2018, Malaysian average CPO price was RM2,421 per tonne, and is currently trading close to RM2,160 per tonne after having recovered from around RM2,000 per tonne
recently.
Subur Tiasa group expanded its oil palm and tree plantation land bank by 15,000 hectares on completion of the acquisition of the Simunjan Estate from Rimbunan Sawit Bhd two months ago. The company paid RM150 million cash for the acquisition.
