PRICEWORTH International Bhd saw its net profit surge six times to RM10.3 million for the nine months ended 31 March 2018.
The timber and sustainable forest management group’s 526 percent jump in net profit followed a 17.5 percent rise in revenue to RM130.4 million for the nine months, it said in an announcement to Bursa Malaysia.
For the third quarter, Priceworth’s net profit grew almost 17 times to RM5.5 million from RM325,000 in the same quarter last year, it said.
“The stable supply of timber from FMU5 has helped Priceworth exceed break-even, and we expect our financial performance to continue improving in the future,” said executive director Richard Koo.
Yesterday, Priceworth shareholders unanimously approved the proposed acquisition of Forest Management Unit 5 (FMU5), a sustainable forest management concession in Sabah. Acquiring FMU5 will cement Priceworth's position as the leading integrated timber player in Sabah, with upstream and downstream assets complemented by its in-house expertise, knowhow and market knowledge.
Priceworth began harvesting two compartments in late 2017, and will start harvesting in another two soon. In April, Priceworth's log production hit a new high of 32,800 cubic metres, its highest since 2011 after Sabah adopted a new sustainable forestry policy.
The timber group also signed a Memorandum of Understanding (MOU) to supply Container Flooring totaling RM600 million over a five year period averaging RM120 million per annum to Chinese manufacturer Foshan Zhengsen Woodworking Co which has been made possible due to the supply of timber from FMU 5.
Meanwhile, Priceworth said it does not expect to be significantly affected by a temporary ban on log exports from Sabah, which was announced yesterday.
“The ban should not have a significant effect on our performance, as export-grade logs comprise less than 10 percent of our total logs production. These export-grade logs are either easily sold locally or channeled into our downstream processing to produce better quality plywood and sawntimber products. There is no shortage of demand for premium plywood from Japan and container flooring from China,” said Koo.