KUALA LUMPUR (Feb 19): Southern Acids (M) Bhd (KL:SAB) has reported its highest quarterly net profit in nearly three years, thanks to higher earning contributions from its oleochemical manufacturing and milling businesses amid strong commodity prices.

The net profit for the third quarter ended Dec 31, 2024 (3QFY2025) rose by more than five times to RM24.96 million, from RM4.57 million a year earlier. This marks its strongest earnings since 4QFY2022, when the company posted a net profit of RM26.68 million.

Earnings per share for the quarter swelled to 18.23 sen, from 3.33 sen in 3QFY2024, the company's bourse filing showed.  

Quarterly revenue rose 30.34% year-on-year to RM303.15 million from RM232.58 million, driven by higher revenue contribution across its three core business segments.

However, no dividend was declared in the quarter.

Southern Acids said the oleochemical manufacturing segment swung to profit before tax (PBT) of RM946,000 from a loss before tax of RM4.89 million 3QFY2024, as revenue increased 17.2% to RM102.42 million from RM87.38 million on higher average selling prices for fatty acids and glycerine.

The milling and cultivation segment’s PBT more than tripled to RM34.05 million from RM10.52 million with revenue up 49% to RM163.26 million from RM109.6 million on higher prices for crude palm oil (CPO) and palm kernel.

However, the healthcare services segment's PBT declined 11.4% to RM8.6 million from RM9.7 million previously, due to a decline in the number of registered outpatients and inpatients, while revenue grew 2.6% to RM30.9 million from RM30.1 million

The stellar quarterly performance pushed Southern Acids' nine-month net profit to RM31.8 million, a near four fold increase compared to RM8.32 million in the previous corresponding period.

Cumulative revenue increased 23.8% year-on-year to RM842.26 million from RM680.36 million.

Southern Acids expects CPO prices to remain volatile in the current year, driven by several factors such as slower than expected production growth in Indonesia, anticipation of higher global soybean production, stronger short-term demand for palm oil supported by key importing countries India and China, and the implementation of Indonesia’s B40 biodiesel mandate beginning 2025.

Southern Acids’s share price closed down three sen or 1% at RM2.97 on Wednesday, giving a market capitalisation of RM407 million.