Shares of TFS Corporation Limited (ASX: TFC) have risen strongly on Thursday after the company reported a record half-year profit of $55 million, whilst also increasing its earnings guidance for the full year.
So What: TFS Corporation is an owner and manager of Indian sandalwood plantations across Australia. Sandalwood is used in a variety of applications. While it can be sold as wood, the oil extracted from the wood can also be sold at a very high price, to then be used in products such as perfumes and even in pharmaceuticals. As it stands, the assumed future sales price of TFS's sandalwood oil is a staggering US$2,800 per kilogram.
For the six-month period ended 31 December, the company reported a bottom line profit of $55 million, up from just $3.24 million in the year-ago period, which came on the back of a 192% lift in revenues to $160.3 million.
In addition to the revenue growth, growth in the valuation of the group's plantation assets and favourable exchange rate movements were the primary reasons behind the strong earnings performance.
While the shares are trading 5.5% higher at $1.81 in mid-afternoon trade, they rose as high as $1.90 earlier in the session.
Now What: Following its record first-half result, TFS Corporation upgraded its full-year earnings guidance to "at least $90 million NPAT (net profit after tax)", up from its initial guidance of at least $70 million. This fares well for shareholders, and for investors looking to open a position today.
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