September 17, 2010
Malaysia's Leong Hup seeks synergistic investments
Malaysia-based poultry company, Leong Hup Holdings Bhd (LHH), said it is looking for synergistic business opportunties.
The company is always on the look-out to acquire business operations that are synergistic and will contribute positively to its long term earnings, according to reports.
Leong Hup executive director Tan Sri Francis Lau Tuang Nguang said the company would continue to focus on further strengthening and developing its broiler segment in the country.
Lau said this could be done by acquiring existing small and medium broilers or establishing joint-ventures with them. He is confident of good prospects for Malaysia's poultry producers, noting that Malaysia's chicken consumption is the highest in the region at 38kg per capita.
Shareholders at the EGM approved the proposed acquisition of the entire issued and paid-up capital of 5.09 million shares in Ladang Ternakan Maju Sdn Bhd (LTM) for MYR10.84 million (US$3.48 million), to be satisfied by MYR10.333 million (US$3.32 million)new LHH shares at MYR1.05 (US$0.33) each.
With LTM becoming a wholly-owned subsidiary of LHH, LHH's annual production of day-old chicks would increase to 134 million from 124 million now, said Lau.
He said LHH's production of broiler chickens would also rise to about 49 million yearly from 40 million, and its market share in broiler farming in Malaysia would expand to 10% from 8%.
According to reports, figures by the Federation of Livestock Farmers' Associations of Malaysia in 2008 showed that over 3,000 broiler farms in the peninsula produced about 491 million birds.
Presently, LHH has more than 80 broilers farms in the peninsula, mostly located in Johor, Perak, Selangor, Malacca and Negri Sembilan while LTM's farms are mainly in Perak and Selangor.
According to reports, LHH recorded a net profit in the financial year ended March 31, at MYR57.13 million (US$18.38 million) and revenue of MYR1.142 billion (US$367 million) against MYR36.26 million (US$11.66 million) and MYR1.141 billion (US$367.17 million), respectively, in FY2009.
For the first quarter to June 30, it posted a lower net profit of MYR10.05 million (US$3.23 million), despite improved revenue of MYR294.8 million (US$94.8 million) compared with MYR13.22 million (US$4.25 million) in net profit and MYR280.61 million (US$90.3 million) in revenue a year earlier.