TSH Resources Berhad FY2025 Financial Analysis: Growth, Resilience & Strategic Moves

TSH Resources Berhad released its financial results for the quarter and year ended 31 December 2025, revealing a year marked by resilience, operational efficiency, and strategic capital management. This analysis breaks down key metrics, segmental trends, exceptional items, and corporate actions, offering investors a clear view of the company’s performance and outlook.

Key Financial Metrics & Comparative Table

Historical Performance Trends

• Full-Year Revenue: RM1,062.2 million in FY2025 (+4% YoY)
• Full-Year Core PBT: RM300.1 million (+26% YoY)
• Full-Year EPS: 13.95 sen (+42% YoY)
• Cash & Cash Equivalents: RM399.7 million at year-end, with net cash position of RM173.5 million
• Dividend Policy Update: Target payout ratio increased to minimum 30% of net profit (previously 20-30%)

Segmental Performance

• Palm Products: Revenue up 5% YoY (RM1,010.4m), Operating profit up 29% YoY (RM325.3m). However, Q4 segment revenue (-13%) and profit (-23%) were down due to lower sales volume and prices.
• Others Segment: Revenue down 3% YoY, operating loss increased (RM15.7m vs RM12.2m).

Exceptional Items and Corporate Actions

• Share Buybacks: Significant repurchase of treasury shares during FY2025, rising from RM17.9m to RM133.6m.
• Dividend: No interim dividends paid in FY2025. A first and final single-tier dividend of 5.0 sen per share is proposed, reflecting improved cash reserves and profitability.
• Asset Movements: Commencement of voluntary winding up of subsidiary TSH Palm Products Sdn. Bhd. at year-end.
• Tax Disputes: Several resolved Indonesian tax cases, mostly in favour of the Group, with significant reductions in assessed liabilities.
• No Material Litigation: Aside from tax disputes, no major litigation disclosed.

Cash Flow, Balance Sheet & Capital Commitments

• Operating Cash Flow: RM329.1 million (FY2025)
• Investing Cash Flow: Outflow of RM47.4 million
• Financing Cash Flow: Outflow of RM117.8 million, mainly due to share buybacks and dividends to non-controlling interests
• Capital Commitments: RM206.6 million as at year-end, indicating ongoing investment in growth
• Total Assets: RM2,670.6 million (down from RM2,747.8 million in FY2024)

Exceptional Earnings or Expenses

• FY2025 saw a significant improvement in core profit and PBT due to stronger Palm Products segment, improved yields, and lower corporate expenses. However, Q4 results were weaker due to seasonal production shifts and inclement weather.
• Export levy and duty on CPO increased by RM26.6 million YoY, impacting margins.

Shareholder Actions

• Major share buybacks in FY2025, reflecting management confidence and capital return strategy.
• Dividend policy now targets minimum 30% payout, with a proposed 5.0 sen dividend for FY2025.

Chairman’s Statement & Outlook

“The Group entered 2026 with a net cash position of RM173.5 million, reflecting strengthened profitability and financial resilience. The Group will continue its new planting programmes and focus on driving productivity, operational efficiency and yield enhancement initiatives to support its financial performance. Barring any unforeseen circumstances and supported by operational resilience and prudent financial management, the Group remains optimistic in delivering a satisfactory performance in 2026.”

Tone: Positive, focusing on resilience, operational strength, and future growth.

Risks, Events & Legal Matters

• Resolved Indonesian tax cases substantially reduced liabilities, supporting the Group’s financial stability.
• Seasonal and weather-related crop production shifts impacted Q4 results.
• No material litigation or corporate proposals pending.

Conclusion & Investment Recommendations

Overall, TSH Resources Berhad delivered a strong financial performance in FY2025, with improved profitability, robust operating cash flows, and enhanced shareholder returns via share buybacks and a higher dividend policy. The positive outlook for 2026 is supported by a net cash position, ongoing productivity initiatives, and prudent management.

• If you are currently holding TSH Resources Berhad: The company’s improved profitability, strong cash position, and enhanced dividend policy suggest holding for continued returns and potential capital appreciation, especially as the board signals confidence in future performance.
• If you are not currently holding: Given the company’s operational resilience, strategic capital management, and positive outlook, TSH Resources Berhad may be considered for portfolio inclusion, particularly for investors seeking exposure to the palm oil sector and dividend growth.

Disclaimer: This analysis is based strictly on information disclosed in the company’s official financial statements. It does not constitute financial advice. Please conduct your own due diligence or consult a licensed advisor before making investment decisions.

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