KUALA LUMPUR (Aug 12): Teo Seng Capital Bhd’s net profit fell 37.41% to RM3.18 million for the second quarter ended June 30, 2020 (2QFY20) from RM5.08 million a year ago, though revenue held steady, no thanks to an increase in feed cost due to a weaker ringgit, lower egg sales and lower contribution from animal health products as demand eased.

The decline in quantity of eggs sold was due to a depopulation of spent layer chicken in 1QFY20, according to Teo Seng's bourse filing today. The lower demand for its animal health products, meanwhile, came after a spike in customer orders in 1QFY20 during the initial Movement Control Order, it said.

Hence, its earnings per share for 2QFY20 slid to 1.08 sen from 1.7 sen a year ago. The group's quarterly revenue came in at RM120.75 million versus RM121.25 million previously.

The weaker quarterly earnings dragged the group's net profit for the first half of FY20, which fell 81.28% to RM5.09 million from RM27.17 million in the corresponding period last year, while revenue dropped 12.89% to RM236.73 million from RM271.76 million. Consequently, its cumulative six-month EPS declined to 1.73 sen from 9.06 sen.

Looking forward, Teo Seng said although the group’s businesses have been categorized under the essential food sector, coupled with the recent improvement in the selling prices of eggs, it expects its performance for the remaining six months of the year to still be challenging due to market uncertainties under the Recovery Movement Control Order (RMCO).

In light of this, It said it will be more prudent in managing its financial resources, operational cost and capex requirements.

The group's share price slid 0.5 sen or 0.6% to close at 83.5 sen today, giving it a market capitalisation of RM245.36 million. Some 714,700 shares were traded. While the stock has  rebounded 25% from its recent low of 67 sen in March, it is still down 35% year to date from when it was trading at RM1.29.