TSH Resources Reports Strong Q2 2025 Growth Amidst Market Volatility
TSH Resources Berhad, a key player in the palm oil industry, has released its financial results for the second quarter ended June 30, 2025. The report reveals a period of significant profit growth, largely driven by the strong performance of its core Palm Products segment. While the company posted impressive numbers, it continues to navigate a complex global market. Let’s dive deep into the key takeaways from this report.
A standout achievement this quarter is the remarkable 139% surge in net profit attributable to shareholders, jumping to RM 49.2 million. This signals strong operational efficiency and favourable market conditions for its key products.
Core Financials: A Story of Impressive Growth
At a glance, TSH Resources’ financial performance for Q2 2025 shows robust growth when compared to the same period in the previous year. The company has successfully translated a modest increase in revenue into a substantial leap in profitability.
Q2 2025 (Current Quarter)
- Revenue: RM 268.8 million
- Core Profit Before Tax: RM 70.6 million
- Profit Before Tax (PBT): RM 71.4 million
- Net Profit Attributable to Owners: RM 49.2 million
- Earnings Per Share (EPS): 3.72 sen
Q2 2024 (Comparative Quarter)
- Revenue: RM 252.5 million
- Core Profit Before Tax: RM 55.9 million
- Profit Before Tax (PBT): RM 35.9 million
- Net Profit Attributable to Owners: RM 20.6 million
- Earnings Per Share (EPS): 1.49 sen
The Group’s revenue saw a healthy 6% increase, primarily due to the strong performance of its Palm Products segment. However, the most striking figure is the 99% jump in Profit Before Taxation (PBT). It is important to note that the PBT for the comparative period in 2024 was impacted by a one-off depreciation charge of RM 22.0 million. Even after accounting for this, the 26% growth in Core Profit Before Tax demonstrates solid underlying operational improvement.
Segment Performance: Palm Products Lead the Charge
A closer look at the business segments reveals that the Palm Products division was the engine of growth, more than compensating for the weaker performance in the “Others” segment, which includes wood products and electricity generation.
| Segment | Revenue (Q2 2025) | Revenue (Q2 2024) | Operating Profit (Q2 2025) | Operating Profit (Q2 2024) |
|---|---|---|---|---|
| Palm Products | RM 255.2 million | RM 235.9 million | RM 79.4 million | RM 59.3 million |
| Others | RM 13.6 million | RM 16.6 million | (RM 5.5 million) | (RM 1.7 million) |
The Palm Products segment’s operating profit surged by 34%, driven by higher sales volumes of Crude Palm Oil (CPO) and Palm Kernel (PK), and a significantly higher average selling price for PK, which rose by an impressive 47% to RM 3,315 per metric ton. While the average CPO price remained stable, the increased output and strong PK prices provided a major boost to the segment’s profitability.
Navigating Market Headwinds and Seizing Opportunities
Looking ahead, TSH Resources acknowledges both opportunities and potential risks in the global market. The company maintains a positive long-term outlook, backed by its operational strengths and strategic initiatives.
Market Outlook
CPO prices have shown signs of recovery and are expected to remain relatively stable in the second half of 2025. This is supported by strong export demand and palm oil’s price competitiveness against other vegetable oils like soybean oil. Furthermore, the proposed expansion of biofuel mandates in the U.S. could indirectly benefit palm oil by driving up soybean oil prices. The Group’s strong balance sheet, which boasts a net cash position as of Q2 2025, provides a solid foundation for growth and resilience.
Potential Risks
Despite the positive outlook, the company remains cautious. Ongoing U.S. tariff actions targeting major trading partners could introduce market volatility and disrupt global trade flows, posing a downside risk. As with any agricultural business, production is also subject to weather patterns, such as El Niño and La Niña, which can impact fresh fruit bunch (FFB) yields.
Summary and Outlook
This section provides a summary of the report’s key findings and a forward-looking perspective. It is intended for informational purposes and should not be construed as investment advice.
TSH Resources has delivered a strong performance in Q2 2025, characterized by robust profit growth and operational resilience in its core palm oil business. The company’s financial health remains solid, positioning it well to navigate market uncertainties and pursue future growth opportunities, such as its ongoing new planting programme.
- Strong Profit Growth: The company demonstrated a significant increase in profitability, with net profit attributable to owners rising by 139% year-on-year.
- Core Business Strength: The Palm Products segment was the primary growth driver, benefiting from higher sales volumes and a substantial increase in Palm Kernel prices.
- Financial Resilience: A strong balance sheet, net cash position, and consistent operating cash flow provide a solid foundation for stability and future investments.
- Cautious Optimism: While the outlook for CPO prices is stable, the Group remains vigilant about potential risks from global trade volatility and weather-related factors.
Final Thoughts
From a professional standpoint, TSH Resources’ Q2 2025 report showcases operational resilience and effective management. The ability to significantly increase profitability on the back of a modest revenue rise points to improved efficiency and favourable product pricing, particularly for Palm Kernel. The strong balance sheet is a crucial asset, providing a buffer against market volatility and funding for its expansion plans. While external risks persist, the company’s solid fundamentals and strategic focus on its core business suggest it is well-equipped for the challenges ahead.
What are your thoughts on the outlook for CPO prices in the second half of the year? Do you think TSH Resources can maintain this growth momentum? Share your views in the comments below!
