Higher costs and tax expenses drag down Teo Seng’s 3Q net profit by 77%

KUALA LUMPUR (Nov 15): Teo Seng Capital Bhd’s net profit plunged 77.34% to RM516,000 in the third quarter ended Sept 30, 2022 (3QFY22), compared to RM2.28 million in the same quarter a year ago, dragged down by higher operating costs, finance costs and tax expenses.

This was on the back of a 15.26% rise in revenue to RM166.58 million from RM144.53 million a year before, according to the poultry farming company’s bourse filing.

Teo Seng’s operating expenses was 27% higher year-on-year (y-o-y) to RM174.08 million in 3QFY22 from RM137.14 million, while finance costs increased 10% y-o-y to RM1.76 million from RM1.6 million.

Tax expenses also escalated to RM5.42 million, a whopping 53.17% jump from RM3.54 million in 3QFY21.

As a result, its earnings per share dropped to 0.18 sen per share in 3QFY22, from 0.77 sen per share.

For the cumulative nine months ended Sept 30, 2022 (9MFY22), Teo Seng posted a net profit of RM8.61 million against a net loss of RM9.05 million in 9MFY21, as cumulative revenue rose 24.69% to RM471.32 million, from RM378 million previously.

In view of the high feed cost and egg subsidy given by the government, the company’s directors are of the opinion that the financial performance remains challenging for the remaining three-month period ending Dec 31, 2022 (4QFY22).

Shares of Teo Seng closed down 0.5 sen or 0.63% to 79 sen on Tuesday (Nov 15), giving it a market capitalisation of RM237 million.