TSH counts on land bank to expand plantation ops
Author: Admin | Filed under: Palm Oil Local NewsBy Yvonne Tan
The Star
21 May, 2011
TSH Resources Bhd is banking on its sizeable unplanted land bank of 60,000ha to continue expanding its plantation business.
It has allocated about RM100mil in capital expenditure (capex) for new planting of oil palm trees on these parcels of land which are largely located in Indonesia, group managing director Datuk Tan Aik Sim said.
The capex, to be spent over the next few years, would be internally funded, he said at a briefing here yesterday.
“We are expecting our cashflow to grow stronger as our oil palm trees mature, therefore the RM100mil capex is not an issue for us,” Tan said.
He said TSH’s gearing level remained low at 0.76 times and was expected to move even lower, in line with the company’s rising cashflow.
Currently, TSH’s planted oil palm plantation in Indonesia and Sabah measures some 39,000ha. Of this, more than half are immature.
Tan said TSH’s fresh fruit bunches (FFB) production was projected to grow at an average compounded growth of 43% over the next four years.
Group chairman Datuk Kelvin Tan said he believed crude palm oil prices (CPO) would remain above RM3,000 per tonne this year.
Analysts are expecting CPO prices to trend lower in the second half of this year, in line with higher production of FFB.
“Regardless of the price, our focus is on productivity,” Kelvin said.
TSH’s net profit rose 112% to RM24mil in the first quarter ended March 31 from RM11.3mil posted in the same quarter a year ago.
Revenue for the quarter stood at RM252.6mil, marginally higher than RM240.5mil posted in the same period last year.
The company said the improved profit was mainly attributable to the strong performance of its Indonesian palm oil operation, which saw FFB production growing by 48%.
Tan said TSH would stick to its dividend policy of distributing 20% to 30% of its net profits to shareholders for now.
