KUALA LUMPUR (Nov 23): Kretam Holdings Bhd sank into red in its third quarter ended Sept 30, 2015 (3QFY15) with a net loss of RM8.08 million or 0.43 sen per share, compared with a net profit of RM1.57 million or 0.08 sen per share in the same period last year, largely on rising costs, and falling earnings in its plantation and mill operations due to lower crude palm oil (CPO) prices.

Notably, its cost of sales and services for the latest quarter rose 16.44% to RM101.19 million versus RM86.9 million in 3QFY14, while its 'other expenses' grew over 45 times to RM7.87 million, from a mere RM172,000 previously, its filing to Bursa Malaysia today showed.

Meanwhile, its quarterly revenue gained 6.9% to RM111.81 million, from RM104.6 million in 3QFY14.

No dividend was declared for the current quarter under review.

For the cumulative nine-month period (9MFY15), Kretam posted a net loss of RM13.24 million or 0.71 sen per share, compared to a net profit of RM8.64 million or 0.47 sen per share in 9MFY14.

Revenue for the period was down 0.3% to RM289.3 million versus RM290.15 million.

Kretam said its plantation and mill operations achieved a revenue (including inter-segment revenues) of RM165.4 million versus RM211.7 million last year, while pre-tax profit fell to RM10 million, from RM41.2 million in the previous year.

"The lower revenue and pre-tax profit compared to the previous year's corresponding period is largely due to lower CPO prices of RM2,139 versus RM2,431 last year, and a 7.7% decline in fresh fruit bunch (FFB) output," it explained.

On the refinery segment, Kretam said it achieved revenues of RM211 million, from RM204.7 million. The segment's pre-tax loss narrowed to RM23.7 million, from RM27.4 million previously.

"Although operating losses had narrowed, the results for the first half of 2015 reflected higher depreciation and finance costs, following the completion of the refinery's expansion," it said.

Looking forward, Kretam said its performance is closely tied to movements in the prices of CPO and refined palm products.

"While the current situation is not very encouraging, the board takes the view that it is a 'bottoming out' phase that is currently underway, and the timing of any rebound in prices is crucial to an improvement to the group's results for 2015," it said.

Shares in Kretam closed unchanged at 47 sen today, for a market capitalisation of RM871.88 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)