QL Resources Bhd’s net profit rose 12.6% to RM92.81 million in the first quarter ended June 30, 2023 from RM82.42 million a year earlier on higher contributions from almost all segments except for its FamilyMart convenience store chain business.

KUALA LUMPUR (Aug 29): Agro-food producer QL Resources Bhd’s net profit rose 12.6% to RM92.81 million in the first quarter ended June 30, 2023 (1QFY2024) from RM82.42 million a year earlier, thanks to higher contributions from almost all segments except for its FamilyMart convenience store chain business.

The group’s quarterly revenue increased by 5.1% to RM1.6 billion from RM1.52 billion, the group’s filing showed. Earnings per share expanded to 3.81 sen from 3.39 sen. No dividend was declared for the quarter under review.

The group’s integrated livestock farming segment recorded a 21% increase in profit before tax (PBT) from RM46.72 million to RM56.36 million, mainly due to the improved performance of its farming operations in Malaysia and Indonesia, with increased production volume and efficiency. In addition, high input costs were partly mitigated by higher government cost subsidies in Malaysia.

At the same time, PBT of its marine products manufacturing segment increased 14% from RM50.1 million to RM57.06 million due to improved margin from efficient production and higher export sales.

Its palm oil and clean energy segment saw a turnaround in earnings, posting a PBT of RM11.38 million compared to a loss before tax of RM4.56 million in the previous year. This was due to higher sales and project margin recovery in Boilermech, improvement in palm oil activities with higher fresh fruit bunches tonnage produced and better oil extraction rate, as well as the absence of foreign currency translation loss.

As for its convenience store chain business, PBT dropped 27% to RM11.59 million from RM15.85 million due to higher operating cost affected by a hike in labour and energy cost. “In addition, [the] new central kitchen has a lower contribution due to lack of economies of scale,” said QL Resources.

Despite the challenges posed by a high interest rate environment and a weak global economic outlook, QL Resources said its management remains cautiously positive about its business performance in the upcoming quarters.

The management also believes that the group will continue to perform satisfactorily, partly due to the cost subsidy maintained by the Malaysian government to help to mitigate high farming costs, it added.

Shares of QL Resources closed two sen or 0.27% lower at RM5.40 on Tuesday, giving the group a market capitalisation of RM13.14 billion.