TH Plantations sees healthy growth with land purchases

Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/25THP/Article/

Published: July 26, 2012

KUALA LUMPUR: TH Plantations Bhd is poised for a stronger balance sheet for future growth with the completion of its acquisition of two companies, which collectively own 41,424ha of land.

TH Plantations, the plantation arm of Lembaga Tabung Haji, primarily engages in the business of oil palm plantations here.

Maybank Investment Bank Research said the acquisition is expected to be completed by the fourth quarter of this year.

"Investors' perception may be slightly negative, given the potential earnings per share dilution of 8.2 per cent.

"Over time, we believe TH Plantations will be re-rated, given its new plantation size of about 86,400ha, making it one of the largest planters in Malaysia," Maybank Investment Bank Research said in a research note.

Post-acquisition, its gross gearing would remain healthy and conducive for growth, at 22 per cent, it said.

"We estimate the proposed acquisitions to add RM33.5 million to TH Plantations' bottomline," the research house added. Bernama