Leon Fuat Achieves Significant Profit Turnaround in Q3FY2023 with PAT Rising to RM5.3 Million

Group’s efficient operation continues to drive growth in profitability despite challenges

SHAH ALAM, 27 NOVEMBER 2023 – LEON FUAT BERHAD (“Leon Fuat” or the “Group”), a manufacturer and trader of steel products specialising in rolled long and flat steel, today reported its financial results for the third quarter ended 30 September 2023 (“Q3FY2023”), demonstrating a notable improvement in profitability compared to the corresponding quarter of the preceding financial year (“Q3FY2022”).

For the quarter under review, Leon Fuat recorded a revenue of RM236.36 million, a 10.1% decrease from RM263.02 million for Q3FY2022. This decline was mainly due to lower sales in the trading and processing of steel products. Despite the drop in revenue, the Group achieved a significant increase in gross profit, reaching RM18.12 million for Q3FY2023, up from RM7.73 million for Q3FY2022. The improvement was mainly driven by better overall gross profit margin, which increased from 3.7% to 7.7%.

The Group also witnessed a significant turnaround in terms of profitability, with a profit before tax (“PBT”) of RM3.99 million for Q3FY2023, as opposed to a loss before tax of RM5.45 million for Q3FY2022.

Compared with the immediate preceding quarter (“Q2FY2023”), there was an increase in revenue from RM217.42 million for Q2FY2023 to RM236.36 million for Q3FY2023. However, gross profit decreased from RM29.66 million for Q2FY2023 to the current quarter’s RM18.12 million, which was mainly impacted by the lower overall gross profit margin from 13.6% to 7.7%.

 For the current year-to-date 9-months result (“9MFY2023”), the Group posted a revenue of RM687.48 million, gross profit of RM76.33 million, and PBT of RM32.95 million. In comparison, the 9MFY2022 showed a revenue of RM786.97 million, gross profit of RM84.44 million, and PBT of RM44.40 million, mainly reflecting the influence of lower average selling price for both trading and processing activities on the Group's performance.

Calvin Ooi Shang How, Executive Director of Leon Fuat said, “The Q3FY2023 results underscore our strategic commitment to operational efficiency and profitability. Our profit margin improved, despite revenue headwinds, highlights our ability to navigate market dynamics effectively. With the impending operational commencement of Phase 2 of our facilities in early 2024, we are poised to further enhance our production capabilities and market reach. We remain optimistic about our long-term prospects and continue to focus on delivering shareholder value through sustainable and strategic business practices.”

As at 27 November 2023, the share price of Leon Fuat is RM0.53, representing a market capitalisation of RM180.7 million.