KUALA LUMPUR (Nov 22): Lay Hong Bhd sank into the red in its second quarter ended Sept 30, 2021 (2QFY22), with a net loss of RM8.65 million compared with a net profit of RM1.16 million in the corresponding quarter a year ago, on lower contributions from its food manufacturing and retail business segments.

The egg producer posted a net loss per share of 1.31 sen for 2QFY22, compared with earnings per share of 0.18 sen for 2QFY21, its filing with Bursa Malaysia showed on Monday. The decline in earnings came despite an increase in quarterly revenue to RM242.05 million from RM228.6 million that came from higher average selling prices of table eggs and higher quantity of table eggs sold.

Lay Hoong attributed the losses incurred in 2QFY22 to lower production of processed chicken products due to the 60% workforce limit imposed during the Movement Control Order period and lower retail sales. The continuation of high commodity prices in the group's supply chain, namely maize and soybean — the major components of its raw materials — also contributed to the quarter's losses.

Compared with the immediate preceding quarter of 1QFY22, Lay Hong's net loss narrowed from RM14.35 million, as revenue rose 5.5% from RM229.43 million.

For the cumulative six months ended Sept 30, 2021, Lay Hong posted a net loss of RM23 million compared with a net profit of RM6.35 million in the same period a year ago, though revenue was marginally higher at RM471.48 million versus RM466.8 million previously.

Going forward, Lay Hong said the reopening of the economy will help revitalise its sales channels, especially in the manufacturing and hotel, and restaurant and cafe businesses, though the continued high commodity prices of maize and soybean meal will pose a challenge to the group to contain costs.

"Taking cognisance of the ongoing tough operating environment, the board will take appropriate mitigating measures to address it and ensure that the group will be able to strive through this difficult time," said Lay Hong.

Lay Hong shares settled half a sen or 2% higher at 25.5 sen on Monday, bringing the group a market capitalisation of RM168.38 million.