TDM Berhad (“TDM” or “the Group”) announced its financial results  for the third quarter ended 30 September 2024 (“3QFY2024”) today. 

The Group's revenue for the three months period ended 30 September 2024 increased by 10% compared to  the previous corresponding quarter mainly contributed by higher revenue from Plantation Division of RM13.4  million and Healthcare Division of RM3.0 million, an improvement of 18% and 3% respectively. The Group  recorded a Loss Before Tax ("LBT") of RM6.4 million during the quarter, as compared to the Profit Before Tax  ("PBT") of RM17.8 million in the previous corresponding quarter. EBITDA for the Group has decreased by 58%  as compared to the previous corresponding quarter. 

The Group's revenue for the nine months ended 30 September 2024 increased by 11% compared to the previous  corresponding period, which contributed by higher revenue from Plantation Division of RM27.6 million, and  Healthcare Division by RM18.3 million, an increment of 15% and 8% respectively. The Group recorded a LBT  of RM18.2 million during the period, as compared to a LBT of RM9.2 million in the previous corresponding  period. Furthermore, EBITDA for the Group has also decreased by 16% as compared to the same period in the  previous year. 

Malaysia Plantation Division 

For 3QFY2024, the Plantation Division recorded higher revenue of 18% mainly due to higher Crude Palm Oil  ("CPO") and Palm Kernel ("PK") sales volume by 13% and 11% as compared to the previous corresponding  quarter. In addition, CPO and PK average price increased during the quarter by 1% and 25% respectively. Our  Plantation Division has registered an EBITDA of RM11.5 million, a decreased of 67% from RM34.6 million,  registering a segmental LBT of RM5.0 million during the quarter. 

For 9M2024 period, revenue from the Plantation Division improved by 15% to RM212.3 million mainly due to  higher CPO and PK sales volume by 12% and 4% respectively, driven by higher FFB production by 9%. However,  this was partly offset by a decrease in Oil Extraction Rate ("OER") and Kernel Extraction Rate ("KER") by 2%  and 6% respectively. The division registered an EBITDA of RM37.7 million, lowered by RM10.9 million or 22%  recorded in the previous period. The Plantation also recorded a LBT of RM13.2 million in this period compared  to a LBT of RM3.1 million in the previous corresponding period. 

Palm oil production in Malaysia has already peaked in August 2024 instead of the normal-cycle October month  during the past three years. Monthly data by MPOB showed palm oil output for September fell by 3.8% from  August, indicating that national production is now entering a downturn, and a further seasonal decline is  expected until February next year.  

The worldwide edible oil market is experiencing a production shortfall. As the global supply of sunflower and  rapeseed oil is expected to tighten further until year end, the soybean crushing could not increase significantly  to offset the production losses from these two vegetable oils despite the prospect of plentiful global soybean  supply. Further supported by inclement weather in Malaysia with the beginning of Monsoon in November and  tightening of CPO export availability from Indonesia under Domestic Market Obligation regulation, CPO prices  are likely to stay above RM4,000 levels towards year end and into the first quarter of 2025. 

Other factors to monitor include the macroeconomic and geopolitical uncertainties such as the US Federal  Reserve interest rate cuts, prospects of economic recovery in China, India’s edible oils inventory levels, risks of  global commodity supply chain disruptions due to ongoing tensions in the Middle East, and any government  policies that might affect the supply and demand of palm and other edible oils. 

Healthcare Division 

Our Healthcare Division continued showing strong performance with a higher revenue by 3%, from RM89.0  million to RM92.1 million during the quarter, compared to the previous corresponding quarter. This was primarily  due to an increase in the average revenue per inpatient by 8% and mitigated by decrease in number of inpatients by 4%, number of outpatients by 9%, inpatient days by 8%, bed occupancy rate by 5% and average length of stay by 4% respectively as compared to previous corresponding quarter. However, there was a slightly decrease  of PBT and EBITDA in Healthcare Division by 10% and 6% respectively during the quarter. 

For the period under review, revenue came in stronger by 8% at RM257.3 million, as compared to RM239.0  million from the previous corresponding period. The top-line growth was attributed to a higher average revenue  per inpatient by 9%. Furthermore, EBITDA for the division recorded an improvement of 6% from the previous  corresponding period, reaching RM35.6 million. PBT stood higher at RM19.0 million, from PBT of RM17.5 million  in previous corresponding period. 

The Division continues to record revenue growth on year-to-year basis and anticipates registering stronger  revenue level in fourth quarter FY2024.  

Inflationary pressure will remain elevated throughout Q4 2024 hence it is expected that Bank Negara will not  resort to the downward revision of Overnight Policy Rate (OPR) from the existing 3% to curb the pressure and  continuously support current ringgit strength. Nevertheless, the strengthening of ringgit shall bring down  imported product price pressures coupled with the easing of global supply chain disruption which positively  impacting the business operation. 

Furthermore, the inflationary pressure may continue to persist arising from government’s key economic reform  through fuel subsidy rationalisation and higher private and public wages. However, increased cash aid allocation  under the recent 2025 Budget and current monetary initiatives may drive to a stabilisation of general price level. 

The Group is continuously enhancing its customer touch point program towards excellent patient care and value based outcome. This includes a more extensive digital technology in-use and the introduction of Artificial  Intelligence (AI) application for medical processes.  

Development stages of greenfield hospitals and expansion of existing hospitals are progressing well as planned  and expected to accelerate further in quarters to come for their immediate transition into construction stage.  The Group expects to increase its operating beds in near future through the licensing of available beds at one  of its hospitals in Kuala Terengganu which is experiencing full capacity for its current bed’s operation. 

Divestment of Plantation Indonesia Division 

The Conditional Share Purchase Agreement ("CSPA") for the disposal of PT Rafi Kamajaya Abadi ("PT RKA") and  PT Sawit Rezki Abadi ("PT SRA") was signed between TDM and Ikhasas Sawit Sdn. Bhd. on the 29 July 2022.  PT RKA continues to be fully managed by PT Ikhasas Sawit Indo Makmur through a management services  arrangement starting 1 August 2022. 

As per announcement to Bursa Malaysia on 2 August 2024, the fulfilment of Condition Precedents has been  extended to Long Stop Date of 31 December 2024. Both TDM and the Buyer remain committed to seeing the  completion of the disposal. 

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