TSH Resources Berhad Q3 2025 Financial Results: Strong Turnaround with Robust Profit Growth

TSH Resources Berhad has released its financial results for the quarter and year-to-date ended 30 September 2025. The group operates mainly in the palm oil sector, with additional activities in wood products and other segments. This analysis summarizes the company’s key financial performance, year-on-year and quarter-on-quarter comparisons, operational highlights, and strategic outlook based solely on the provided financial report.

Key Financial Metrics and Comparative Table

Historical Performance Trends and Financial Highlights

• Year-to-date (9M 2025) revenue grew 11% to RM807.8 million versus RM726.8 million in 9M 2024, driven mainly by higher sales volume and improved average selling prices for palm products.
• Year-to-date net profit attributable to owners more than doubled (+108%) to RM153.8 million from RM73.8 million in the same period last year.
• Gross profit margin improved significantly, up 33% YoY for the year-to-date period.
• Palm Products segment remains the primary revenue driver, with segment revenue up 12% YoY and operating profit up 58% YoY for 9M 2025.
• Operating cash flow for 9M 2025 was much stronger at RM244.7 million (vs RM145.0 million in 9M 2024), supporting a healthy cash balance and net cash position.
• Share buybacks: The company repurchased RM94.3 million worth of shares in 9M 2025, increasing treasury shares to 96.5 million from 14.8 million at end-2024.

Segment Performance

• Palm Products: Revenue and profit growth were supported by both stronger sales volumes and higher average selling prices for Crude Palm Oil (CPO) and Palm Kernel (PK).
• Others Segment: Continued to register operating losses, which widened YoY due to lower rubber prices and inventory write-downs in the wood division.

Exceptional Items and Notable Events

• No dividends were paid or declared during the quarter or year-to-date 2025, compared to prior years where dividends were paid.
• No unusual items affected assets, liabilities, equity, net income, or cash flows for the period.
• One-off depreciation adjustment of RM22.0 million in 2024 was not repeated in 2025, which boosted YoY profit comparisons.
• Capital commitments: Significant increase to RM180.3 million as at September 2025 (vs RM62.7 million as at end-2024), indicating ongoing expansion or replanting programs.
• Related party transactions: RM182.6 million in crude palm oil sales and RM37.9 million in palm kernel sales to joint ventures year-to-date.
• No material changes in contingent liabilities, legal disputes, or group composition apart from minor dissolutions of dormant subsidiaries.
• Borrowings: Remain manageable, with total loans and borrowings at RM284 million, and a net cash position at the group level.

Chairman’s Statement and Management Outlook

CPO prices trended upward through Q3 2025 before easing in October as production picked up. Looking ahead, prices are expected to remain relatively stable above RM4,000/MT, supported by sustained export demand and steady consumption, but could face downward pressure if production continues to rise in Q4. The CPO outlook is further influenced by global factors. While amidst a bumper soybean crop, geopolitical uncertainties and ongoing tariff actions may introduce price volatility and disrupt trade flows of CPO. Additionally, currency fluctuations and energy market trends could impact cost structures and margins.

Despite external challenges, the Group maintains a positive long-term outlook. Its strong balance sheet, net cash position, and consistent cash flow provide a solid foundation for future growth. The Group is progressing with its replanting and new planting programme, which is set to expand planted hectarage over the coming years, providing a more resilient base for future profit growth. Management will continue to prioritise on operational efficiency to further improve productivity and oil yield per hectare through mechanisation and digitalisation.

With its operational resilience and prudent financial management, the Group remains confident in delivering a satisfactory full-year performance in 2025.

The tone of the Chairman’s statement is positive, emphasizing operational strength, financial prudence, and confidence in future performance despite acknowledging external risks.

Summary of Corporate Actions

• No new fundraisings, IPOs, or major divestments.
• No material litigation or court cases affecting the group.
• Substantial share buybacks executed during the period.
• No declared or proposed dividends for the quarter or year-to-date.

Conclusion and Investment Recommendation

Overall Financial Performance and Outlook: TSH Resources Berhad delivered a strong turnaround in Q3 and 9M 2025, with significant improvements in revenue, profit, and cash flow. The core Palm Products business benefited from both volume gains and stronger prices, while prudent cost control and lower finance costs further lifted margins. The group’s healthy balance sheet, net cash position, and continued investment in plantations underpin a positive long-term outlook. The absence of dividends is a negative for income-focused investors, but the aggressive share buyback program suggests management sees value at current share prices.

Recommendations

• If you are currently holding TSH Resources shares:
  • Maintain your position. The company’s fundamentals have strengthened, and management’s positive outlook, combined with visible cash generation and share buybacks, indicate potential for further value realization.
  • Monitor for dividend resumption and any changes in CPO price trends, as these could impact short-term sentiment.
• If you are not currently holding TSH Resources shares:
  • Consider initiating a position, especially if seeking exposure to the plantation sector and CPO price uptrend. The company’s strong earnings momentum and net cash position offer downside protection.
  • Be aware that share price appreciation from current levels may depend on sustained CPO prices, further operational improvements, or a return to dividend payments.

Disclaimer: This analysis is based solely on the company’s published financial results and does not constitute investment advice. Please consult your financial advisor and consider your own risk tolerance before making any investment decisions.

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