TH Plantations to gain from output recovery
The planter recorded a headline profit after tax and minority interest (Patmi) of RM8.4mil for the first quarter of financial year 2025 (1Q25), which was down 67% quarter-on-quarter and eased 2% year-on-year (y-o-y).
Its Patmi was watered down by unrealised foreign-exchange loss, mitigated by fair value gains on biological assets.
Adjusted, TH Plantations posted a 1Q25 core Patmi of RM10.8mil that was 23% of Maybank IB's full-year forecasts.
The research house had lowered TH Plantations' earnings forecasts as the 1Q25 results were slightly below expectations.
'Following our earnings cut, we lowered our target price on the stock to 54 sen from 58 sen previously,' the research house noted.
Maybank IB has also conservatively trimmed TH Plantations' fresh fruit bunch growth by 4% for financial year 2025 (FY25), FY26 and FY27 respectively, which implied y-o-y growth estimates for FY25 at 1% (previously 5%) while FY26 and FY27 growth estimates were unchanged at 2% y-o-y.
Meanwhile, the it has cut its FY25-FY27 core Patmi by 7% each year.
It said 'earnings are sensitive to output changes due to our all-in operating cost to customer forecast of RM2,800 per tonne.'
'The group's key catalyst remains the speed of its deleveraging exercise to improve its balance sheet position,' said Maybank IB.
It added that the banking group continued to earmark RM810mil of its assets for disposal as at end-March 2025.
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