Recommend to accumulate the JTiasa when the share price below RM4.00.
Although the contribution of the oil Palm division remained relatively insignificant., but when more planted area come into maturity in the time to come, oil palm division is expected to contribute significantly to the earning of the group.
Total planted area is increased to 22,445 hectares. Total matured area stood at 2788 hectares and expect the matured area will increase to 4195 hectares for current financial year 2008.
Jaya Tiasa Quarter Report - 1QFY08
Review of Performance
The Group registered a revenue of RM173.9 million for the quarter under review, a decrease of 9.5% from the RM192.2 million recorded in the corresponding quarter of the previous financial year. The pre-tax profit of the Group for the quarter under review of RM25.3 million was 22.6% lower than the RM32.7 million recorded in the corresponding quarter of the previous financial year. The lower revenue and pre-tax profit were attributed mainly to the lower sales volume and weaker US Dollar during the quarter under review. The selling prices of the timber products had also softened but the impact was partially cushioned by increased sales of high value products.
No comparison of cumulative results is presented as this is the first quarter for the financial year ending 30 April 2008.
Comparison of Results with Preceding Quarter
The Group’s revenue for the current quarter under review had decreased by 25.8% to RM173.9 million from the RM234.2 million posted in the immediate preceding quarter. The pre-tax profit had also decreased by 39.3% to RM25.3 million from RM41.7 million recorded in the immediate preceding quarter. The lower revenue and pre-tax profit were due mainly to the softening of the timber prices and demand for timber products during the quarter under review.
Commentary on Prospects
Although the timber prices have softened in recent months, the long-term outlook of the timber industry is expected to remain promising in view of the limited log supply and sustained demand for timber products from emerging economies such as China and India.
The recent move by the Federal Reserve of the USA to cut a key interest rate by fifty basis points has caused the US Dollar to slide further against most of the major currencies. Any further weakening of the US Dollar will have a direct impact on the earnings of the timber export business of the Group, which are denominated mainly in the US Dollar. Besides, surging crude oil price, which once again hit record high in recent weeks, will undoubtedly exert an upward pressure on the operating costs of the Group. In view of this, the Group will continue to focus on improving the efficiency and productivity in order to meet the challenges ahead.
Barring any unforeseen circumstances, the Board is confident that the Group will deliver a satisfactory set of financial results for the current financial year.
Pervious blog on Jaya Tiasa
http://phuah.blogspot.com/2007/06/press-release.html
