KUALA LUMPUR (Feb 24): QL Resources Bhd's net profit for the third financial quarter ended Dec 31, 2021 (3QFY22) declined by 21.7% to RM59.79 million from RM76.33 million a year ago due to compressed margins in its marine product manufacturing (MPM) and integrated livestock farming (ILF) segments.

Earnings per share (EPS) for the quarter were lower at 2.46 sen compared with 3QFY21's 3.14 sen as a result, according to its filing.

QL Resources' revenue, however, grew by 26% to RM1.4 billion from RM1.11 billion thanks to increases in sales across all of its business segments.

For the cumulative nine months ended Dec 31, 2021 (9MFY22), the agribusiness group's net profit of RM147.93 million slid by 25% from RM197.34 million a year prior. Nonetheless, its revenue climbed 22.6% to RM3.87 billion from RM3.16 billion in 9MFY21, while cumulative EPS were lower at 6.08 sen for the period compared with 8.11 sen in 9MFY21.

Reviewing its ILF segment, QL Resources said the segment reported a 24% increase in cumulative revenue to RM2.52 billion due to higher feed raw material trading prices, increase in egg production volume, higher farm produce prices and surge in FamilyMart sales. However, the segment's profit before tax (PBT) halved to RM32.39 million due to high feed costs, depressed egg selling prices coupled with price controls imposed in December 2021.

QL Resources' MPM segment had an 8% decrease in cumulative sales at RM885.72 million for the period caused by low fish landing and disruptions in fishing activities from the shortages of foreign fishing crew in 1HFY22 even though surimi-based products recorded higher sales while cumulative PBT decreased by 25% to RM156.56 million due to lower sales volume, margin erosion with higher production costs and additional Covid-19 compliance costs.

Meanwhile, QL Resources said its palm oil and clean energy segment had an outstanding performance. The segment's revenue leapt 175% to RM469.87 million while its PBT more than tripled to RM39.49 million.

It said that the consolidation of Boilermech's sales after it became a subsidiary in 4QFY21, higher FFB tonnage harvested, significant improvement in crude palm oil selling prices and improved contributions from its Indonesian plantation were the reasons for the segment's outperformance.

On prospects, QL Resources said that with the outbreak of Russia-Ukraine war, the rise in Covid-19 cases due to Omicron variant and notwithstanding the seasonal factor, it remains cautiously optimistic that its overall business performance will continue to recover in 4QFY22 with egg and chicken price subsidies.

At market close on Thursday, QL Resources' shares fell five sen to RM4.90, valuing it at RM11.93 billion. The stock is trading at 42.8 times its historical earnings based on Bloomberg data. Year-to-date, its share price has gained 22 sen or 4.7% from RM4.68.