December 1, 2022

 

Malaysian feed mill and poultry firm Leong Hup reports higher profits in Q3

Leong Hup International Bhd, a major Malaysian feed mill and poultry company, has posted a net profit of MYR 67.31 million (~US$15.1 million; MYR 1 = US$0.22) in the third quarter of this year, compared to a net loss of MYR 53.42 million (~US$12 million) in the same quarter in 2021 thanks to higher contribution from both livestock and poultry-related products and feed mill segments, The Edge Markets reported.

 

According to the company's bourse filing, its quarterly revenue increased 30.53% from MYR 1.81 billion (~US$406 million) in the same quarter of 2021 to MYR 2.36 billion (~US$530 million) this quarter. No dividend was declared during the quarter under review. 

 

Earnings before interest, tax, depreciation, and amortisation (Ebitda) for the livestock and poultry-related products segment increased by 261% year-on-year to MYR 87.76 (~US$19.7 million) million, primarily as a result of improved margins from higher average selling prices and sales volumes of broiler chickens in Vietnam as well as higher average selling prices of day old chicks (DOC) and broiler chickens in Malaysia.

 

The company said government grants and subsidies for livestock totaling MYR 51.5 million (~US$11.5 million) also helped to improve Ebitda.

 

The feed mill segment, which Ebitda increased by 34.1% year-on-year to MYR 126.44 million (~US$28.4 million), benefited from higher average selling prices and increased sales volume in Indonesia, as well as better margins.

 

A review of the group's geographic segmentation shows that Indonesia remains its largest segment, accounting for MYR 865 million (~US$194 million) or 36.7% of the group's overall revenue in the third quarter of FY2022. Malaysia contributed MYR 589.8 million (~US$132 million) or 25%, and Vietnam contributed MYR 590.3 million (~US$132 million) or 25%, respectively.

 

Singapore and the Philippines contributed MYR 115.4 million (~US$25 million) or 4.9%, and MYR 197.9 million (~US$44.4 million) or 8.4%, respectively.

 

In the nine months that ended on September 30, 2022, the company's net profit more than doubled to MYR 128.19 million (~US$28.8 million) from MYR 47.42 million (~US$10.6 million), as revenue increased by 25.87% to MYR 6.72 billion (~US$1.5 billion) from MYR 5.34 billion (~US$1.2 billion).

 

Leong Hup said that while demand has increased, its financial performance has been made uncertain by the high cost of raw materials and government efforts to control food inflation.

 

Tan Sri Lau Tuang Nguang, Leong Hup's executive director and group CEO, said that the group's efforts to control costs over the previous two years have paid off, and they are now reaping the benefits.

 

-      The Edge Markets