KUCHING: Jaya Tiasa Holdings Bhd’s latest quarterly results have seen massive losses due to the sharp drop in sales volume of logs and plywood and selling prices of crude palm oil (CPO) and palm kernel (PK). In fourth quarter ended June 30, 2019 (Q4-2019), its group losses ballooned to RM91.1 million from RM48.4 million in Q4-2018 or by 42.7 million or 88 percent. Loss per share increased to 9.42 sen from 5 sen. In Q4-2019, revenue from timber business plunged by 39 percent to RM35.7 million from RM58.2 million in Q4-2018 while revenue from oil palm business fell by 20 percent to RM98.4 million from RM123.4 million.
The timber segment incurred pre-tax loss of about RM12.3 million, a reversal from a pre-tax profit of RM3.8 million while the oil palm segment narrowed its pre-tax loss to about RM5.1 million from loss of RM24.2 million previously. For financial year ended June 30, 2019 (FY2019), group revenue fell to RM637.7 million from RM841.7 million in FY2018 or down by RM204 million or 24 percent.
Group net loss skyrocketed to RM275.7 million from RM80.2 million. Loss per share rose to 28.48 sen from 8.28 sen year-on-year. On a yearly basis, Sibu-based Jaya Tiasa said the lower revenue for the timber segment was due to a 45 percent drop in sales volume of logs and 39 percent decline in sales volume of plywood as a result of reduction in log production.
“Decline in revenue of the oil palm division was mainly due to lower selling prices of CPO and PK despite a 13 percent and 23 percent rise in sales volume respectively,” the company said in notes to its latest financials. It attributed the higher yearly pre-tax loss to high unit production cost of logs as a result of a 26 percent decrease in production output and lower CPO and PK selling prices by 23 percent and 36 percent respectively.
As compared to Q3-2019, the group recorded higher revenue from oil palm division to about RM98.4 million in Q4-2019 (Q32019: RM81.4 million) due to a 47 percent increase in fresh fruit bunch production which has boosted the CPO and PK sales volume by 27 percent and 10 percent respectively.
“The improvement in the operating performance for both oil palm and timber divisions were attributed to the lower unit production cost as a result of high production volume and cost control measures.” it added. The oil palm division recorded operating profit of RM3.46 million in Q4-2019 against a huge loss of RM54.9 million in Q3-2019 while the operating loss of the timber segment was narrowed to RM7.79 million from RM18.9 million.
Commenting on the group’s prospects going forward, Jaya Tiasa said: “We believe the CPO price is recovering gradually with the proposal from China on the quota removal of palm oil imports and its ban on US agricultural products. “However, the performance of the group is dependent on the economic and market sentiment and the development of the trade tensions.” Jaya Tiasa said its board of directors is cautious on the development of the external environment and weak global demand, and would continue to focus on cost management and operational efficiency.
