TH Plantations Berhad Q1 2025 Latest Quarterly Report Analysis

Greetings, fellow investors and market watchers! Today, we’re diving deep into the latest financial pulse of TH Plantations Berhad (THP) as they release their first-quarter report for the period ended 31 March 2025. This report offers a fascinating glimpse into the operational dynamics of a key player in Malaysia’s palm oil sector, showcasing both resilience and the challenges inherent in the industry.

While THP has managed to grow its top line, thanks to robust commodity prices, the bottom line tells a slightly more nuanced story, reflecting the volatile nature of the palm oil business and specific operational factors. Let’s break down the numbers and see what’s truly driving THP’s performance.

Q1 2025 Performance: A Tale of Prices and Production

TH Plantations Berhad has reported a mixed bag for the first quarter of 2025. On one hand, revenue saw a healthy increase, primarily buoyed by stronger commodity prices. On the other, profit figures experienced a decline, influenced by factors such as lower sales volumes and shifts in fair value gains.

Year-on-Year Comparison (Q1 2025 vs. Q1 2024)

Comparing the current quarter with the same period last year reveals a significant uplift in revenue, showcasing the positive impact of higher palm oil prices. However, this didn’t fully translate to the profit lines.

Here’s a closer look at the key variances:

• Revenue: Increased by 13.87%, from RM157.31 million to RM179.13 million. This was primarily driven by a significant surge in average realised prices for Crude Palm Oil (CPO), Palm Kernel (PK), and Fresh Fruit Bunches (FFB).
• Average Realised Prices: CPO prices jumped by 20.73% to RM4,577/MT, PK by a remarkable 66.79% to RM3,551/MT, and FFB by 22.72% to RM902/MT.
• Sales Volumes: Despite the higher prices, sales volumes across the board were lower: CPO sales volume decreased by 11.28%, PK by 2.44%, and FFB by 4.27%.
• Profit Before Tax (PBT): Declined by 7.64% to RM25.55 million. This drop was mainly attributed to lower fair value gains on biological assets, which saw a reduction from RM7.21 million in Q1 2024 to RM3.63 million in Q1 2025.
• Profit Attributable to Owners of the Company (PATAMI): Saw a slight decrease of 1.49%, landing at RM12.85 million.
• Earnings Per Share (EPS): Marginally down from 0.97 sen to 0.95 sen.

Quarter-on-Quarter Comparison (Q1 2025 vs. Q4 2024)

Looking at the sequential performance, the first quarter typically experiences lower production due to seasonal factors. This trend is evident in THP’s latest figures.

Key quarter-on-quarter changes:

• Revenue: Declined by 33.76% from RM270.42 million in Q4 2024 to RM179.13 million in Q1 2025. This was primarily due to lower sales volumes of CPO (-39.80%), PK (-37.41%), and FFB (-6.22%), consistent with the seasonal low production cycle.
• Average Realised Prices: Partially mitigated the volume impact with CPO prices increasing by 5.34% and PK by 13.16%. However, FFB prices saw a slight decline of 8.15%.
• Profit Before Tax (PBT): Decreased significantly by 60.88%. This was mainly due to lower operating profit, higher unrealised foreign exchange losses, and the absence of fair value gains on forestry assets which were present in the previous quarter.

Financial Health and Cash Flow Snapshot

From the balance sheet, THP’s total assets saw a marginal decrease from RM2.69 billion (31 Dec 2024) to RM2.68 billion (31 Mar 2025). Total equity, however, increased to RM1.39 billion from RM1.37 billion, leading to an improved net asset per share of RM0.89 (from RM0.86).

On the cash flow front, net cash generated from operating activities saw a notable decrease to RM4.64 million in Q1 2025 compared to RM27.00 million in Q1 2024. This, combined with increased cash used in financing activities (due to higher dividend payments to non-controlling interests and loan repayments), resulted in a net decrease in cash and cash equivalents of RM21.10 million for the quarter.

Navigating the Future: Risks and Prospects

The palm oil industry remains inherently dynamic, influenced by a myriad of factors. THP acknowledges this volatility in its outlook.

Despite the challenging and unpredictable operating environment, THP’s management remains focused on delivering its performance targets for FY2025, while maintaining a cautious outlook. Their strategy appears to be one of resilience and careful navigation through market uncertainties.

Summary and

TH Plantations Berhad’s Q1 2025 results paint a picture of a company benefiting from strong commodity prices, which boosted its revenue. However, the seasonal nature of palm oil production, coupled with lower fair value gains and higher operating costs, impacted its profitability compared to both the previous year’s corresponding quarter and the preceding quarter. The company’s strategic move to classify certain assets as held for sale suggests a potential restructuring or optimization of its portfolio, which could be a positive long-term development.

While the operating environment remains challenging due to price volatility, supply-side constraints, and geopolitical factors, THP’s commitment to its performance targets for FY2025 indicates a proactive stance. The increase in net assets per share is also a positive sign for shareholders, reflecting an improvement in underlying value.

From my perspective as a blogger, THP’s performance highlights the inherent cyclicality of the plantation sector. While high commodity prices offer a tailwind, operational efficiencies and strategic asset management will be key to sustainable profitability. The ongoing efforts to dispose of non-core assets could unlock value and improve the company’s financial flexibility in the long run.

So, as Malaysian retail investors, what are your thoughts on TH Plantations Berhad’s latest results? Do you believe the current elevated palm oil prices can sustain THP’s revenue momentum through the year, or will the production and cost challenges continue to weigh on its profitability? Share your insights in the comments below!