Improved livestock and poultry and feed mills segments lift Leong Hup in 3Q

KUALA LUMPUR (Nov 29): Leong Hup International Bhd (LHI) posted a net profit of RM67.31 million or 1.84 sen earnings per share in the third quarter ended Sept 30, 2020 (3QFY2022), against a net loss of RM53.42 million or 1.46 sen loss per share in the same quarter last year, underpinned by higher contribution from both livestock and poultry-related products and feed mill segments.

LHI’s bourse filing showed that its quarterly revenue rose 30.53% to RM2.36 billion, from RM1.81 billion in the same quarter in 2021. No dividend was declared during the quarter under review.

The livestock and poultry-related products segment’s earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 261% year-on-year (y-o-y) to RM87.76 million, due primarily to better margins from the higher average selling price and sales volume of broiler chickens in Vietnam, and higher average selling price of day old chicks (DOC) and broiler chickens in Malaysia.

“Government subsidies and grant on livestock of RM51.5 million recognised by the group also contributed to the improved Ebitda,” it added.

Meanwhile, its feed mill segment, which Ebitda improved by 34.1% y-o-y to RM126.44 million, benefited from better margins from the higher average selling prices and sales volume in Indonesia.

On a geographical segmentation review, Indonesia continues to be the largest segment of the group, contributing RM865 million (36.7%) to the group’s total revenue for 3QFY2022. Vietnam was the second highest at RM590.3 million (25%), followed by Malaysia which contributed RM589.8 million (25%).

Meanwhile, Singapore and the Philippines contributed RM197.9 million (8.4%) and RM115.4 million (4.9%) respectively.

For the cumulative nine months ended Sept 30, 2022 (9MFY2022), its net profit increased more than two folds to RM128.19 million, from RM47.42 million, as revenue expanded 25.87% to RM6.72 billion, from RM5.34 billion previously.

On prospects, LHI said demand has improved but the high cost of raw materials and the attempts by governments to manage food inflation has created uncertainties for its financial performance.

In a separate statement, LHI executive director cum group chief executive officer Tan Sri Lau Tuang Nguang shared that the efforts by the group to control costs over the past two years have borne fruit and LHI is reaping the results now.

Nevertheless, he said the group will continue to build resilience and prepare the group for expected increases in interest rates.

Shares in LHI closed up 0.5 sen or 1.04% at 48.5 sen on Tuesday (Nov 29), giving it a market value of RM1.77 billion.