Sri Trang Agro-Industry (Sri Trang Agro) announced a profit of THB517.3 million ($20.03 million) in its 3QFY2024 ended September update released on Nov 8, reversing from a loss of THB410.2 million in the previous corresponding period.
This was driven by the performance of natural rubber (NR), which saw higher sales volumes and average selling price (ASP) due to robust demand, especially for European Union’s Deforestation Regulation (EUDR) rubber.
Earnings per share for the period stood at THB0.34.
Sri Trang Agro reported a revenue of THB31.62 billion, representing a 87.3% y-o-y increase from THB16.88 billion in FY2023. Revenue from NR accounted for 79.7% of total revenue, growing 106.1% y-o-y.
Sales volume of NR in 3QFY2024 totalled 380,565 tonnes, growing 53.1% y-o-y — recording the fourth consecutive quarter of volume growth.
Sale volume of EUDR rubber totalled 62,755 tonnes, accounting for 16.5% of total sales volume, as tire producers were stocking up in preparation for the implementation of the EUDR.
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Sri Trang Agro’s gross profit in 3QFY2024 totalled THB3.29 billion, increasing 122.5% y-o-y.
Gross profit margins in 3QFY2024 stood at 10.4%, up from 8% in 3QFY2023.
Within products, gloves bore the brunt of the rapidly appreciating Thai Baht, which impacted ASP. The high latex costs from 2QFY2024 also led to lower profit margins.
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Overall, demand in 3QFY2024 has significantly improved compared with the same period in 2023.
NR supply in Thailand has returned to normal, the NR supply situation in Indonesia remains unchanged while NR supply in Ivory Coast continues to provide high yield, growing by over 16% during the past year.
NR prices in 4QFY2024 have been volatile.
At the start of 4QFY2024, the market continued its momentum from 3QFY2024 and received a boost from the Chinese government’s stimulus measures which led to a price of TSR20 on Singapore Commodity Exchange to reach a high of $2.18 per kg.
However, the proposal to delay by one year the implementation of the EUDR has caused uncertainty and led the price of TSR20 to move between $1.90 to $2 per kg following the announcement.
As at 3.51pm, units in Sri Trang Agro are trading 7 cents lower or 8.54% down at 75 cents.
