KUALA LUMPUR (June 28): Subur Tiasa Holdings Bhd registered a net loss of RM13.9 million in the third quarter ended April 30, 2016 (3QFY16) as compared to a net profit of RM2.71 million in the corresponding quarter a year ago.

According to the filing to Bursa Malaysia today, the decline in earnings was mainly due to lower average free on board (FOB) export selling price of logs, plywood and sawn timber; higher raw material costs for manufacturing of timber products; and higher volume of fertilizer applied to higher acreage of mature oil palm trees.

The Group's revenue for 3QFY16 decreased 37.6% to RM110.2 million from RM176.7 million.

For its cumulative nine-month period (9MFY16), the Group recorded a net loss of RM15.6 million as compared to the net profit of RM5.96 million in 9MFY15.

The loss was mainly due to decrease in export sales volume for logs and timber products, increase in raw material costs for timber products, and higher overhead unit cost for logging operation and manufacturing of timber products.

Subur Tiasa's revenue for 9MFY16 declined 33.1% to RM416.9 million from RM623 million in the same corresponding period a year ago.

On the Group's prospect, the filing read, "The slowdown in global economy is expected to continue in year 2016. This together with current low commodity prices will have negative impact on the global outlook."

It, however, noted that logs prices are expected to be favourable in view of prevailing tight supply of logs and the strong US dollar against the ringgit.

The upcoming peak crop season will see an increase in fresh fruit bunch production in Subur Tiasa's oil palm plantation. This segment is expected to contribute positively to the Group as El Nino's dry weather effects have reduced global crude palm oil (CPO) output thus pushing CPO price up. The quantum of profit contribution is closely dependent on the movement of CPO price, which also correlates to the price movement of world edible oils, according to its bourse filing.

"The Group will focus on improving the existing business while diversifying into other businesses in order to deliver sustainable profitability and continual growth of the organisation," it said.

As of closing, Subur Tiasa was untraded at RM1.53 with a market capitalisation of RM287.8 million.