Focus Lumber declares dividend as 2Q profit doubles, sees strong FY22 despite US slowdown

KUALA LUMPUR (Aug 22): Focus Lumber Bhd has said its net profit for the second quarter ended June 30, 2022 (2QFY22) more than doubled to RM10.61 million from RM4.13 million a year earlier, as higher demand and a strong US dollar more than offset higher costs arising from inflation.

Earnings per share for 2QFY22 rose to 10.46 sen from 4.18 sen, the group's Bursa Malaysia filing showed.

In line with the higher demand and the strong greenback, Focus Lumber's quarterly revenue rose 23.28% to RM40.81 million, from RM33.1 million a year ago.

The group declared a dividend of 5.38 sen per share, bringing its half-year total to 8.38 sen per share.

For the cumulative six months ended June 30, 2022, Focus Lumber's net profit saw a 14-fold increase to RM18 million from RM1.24 million, as revenue rose 29.92% to RM73.73 million from RM56.75 million.

On its prospects, Focus Lumber noted that while it sees a slowdown of US demand for wood products, the impact on the group will be minimal amid pending orders as of end-June of 17,550m3 — amounting to 36% of volume sold in FY21.

Costs are also seen to increase moderately in the coming quarters, the group said.

"We anticipate broad-based inflation and the rapid rise in mortgage rates may slow down the US housing industry and recreational vehicle sector. This may indirectly affect the demand and market price of our plywood in the long run.

"Currently, we are closely monitoring the macro-environment and in no rush to increase our production volume.

"However, the board of directors remains confident that the group will report excellent results for the remaining period of the current financial year (FY22)," the group added.

Focus Lumber shares rose two sen or 1.44% to RM1.41, giving it a market capitalisation of RM157.55 million. Year-to-date, the counter has risen 13.71%.