KUALA LUMPUR (Aug 29): Lay Hong Bhd posted a net profit of RM3.71 million in the first quarter ended June 30, 2022 (1QFY23) compared to a net loss of RM14.35 million a year ago, on the back of higher revenue due to higher poultry product prices.

Earnings per share stood at 0.5 sen compared to loss per share of 2.17 sen in 1QFY22, the group’s filing with Bursa Malaysia showed.

Revenue for the quarter increased 16.11% to RM266.4 million from RM229.43 million previously, helped by improved revenue contributions from its integrated livestock farming (ILF) segment and retail business.

The ILF segment, the largest revenue contributor to Lay Hong, saw an increase of 31.2% to RM224.92 million from RM171.43 million in 1QFY22 on higher average selling price (ASP) of poultry products.

The retail segment, meanwhile, expanded 9.36% to RM67.51 million from RM61.73 million due to price adjustment.

Lay Hong’s food manufacturing segment, however, declined 3.39% to RM97.95 million from RM101.39 million previously, due to lower production output which stemmed from a continuation of the shortage of raw materials as well as shortage of manpower.

On a quarter-on-quarter bases, the group’s net profit was down 80.4% from RM18.93 million in 4QFY22, despite revenue increasing 5.59% from RM252.3 million.

This lower profitability was due to lower ASP of poultry products coupled with year-end cost adjustments in the 4QFY22 results in relation to fair valuation of biological asset and accrual of government subsidies.

Lay Hong said the subsidies extended to farmers and the recent easing on the recruitment of foreign workers have temporarily helped the group’s operations, in particular its food manufacturing segment.

With current government interventions, the supplies and prices of eggs and chicken have somewhat stabilised, the group said, but noted that input costs have continued to remain at almost the same level as previously.

“With this backdrop, going forward it would be a challenge for the group,” it added.

Shares in Lay Hong settled one sen or 3.85% lower at 25 sen, giving the group a market capitalisation of RM185 million.