TH Plantations Bhd ... May 09

TH Plantations Bhd, the pilgrim fund Lembaga Tabung Haji’s (LTH) listed arm, said 2009 would be a good year for the company if crude palm oil (CPO) prices stabilise at the current level.

One of the biggest cost considerations for the company was the price of fertiliser, which skyrocketed in tandem with the price of commodities last year (2008). The single largest contributor to our costs is fertiliser.

TH Plantations could still remain profitable should CPO prices suddenly drop again as it would be able to temporarily reduce its cost of production below the RM1,000 mark should the need arise.

TH Plantations manages LTH’s palm estates in Indonesia and its teak and rubber estates in Sabah.

TH Plantations received RM21.4 million from LTH in management fees for 2008, around RM17 million of which was from the latter’s estates in Indonesia. This was up from RM18.7 million in 2007.

LTH owns about 82,000ha of contiguous palm estate land in Indonesia, of which 70,000ha has been planted.

Financial Results …

TH Plantations’ revenue for 2008 came in at RM243.4 million, up 39% from RM175.6 million in 2007. Net profit was up 37% to RM84.1 million from RM61.2 million.

Part of its cash flow was bolstered by the management fee it received from its parent company.