Earnings from government subsidies has helped boost Lay Hong Berhad’s third quarter net profit as of December 31, 2023 to surge 688.89% to RM54.907 million from RM6.96 million the preceding year.
Net profit for the first nine months rose 321.15% to RM62.945 million, compared with RM14.946 million in the previous period.
Fourth-quarter revenue decreased by 0.17% to RM266.698 million, and full-year revenue fell by 3.97% to RM768.731 million.
In a statement, Lay Hong said revenue from the integrated livestock business (ILF) segment fell by 24.38% or RM70.67 million in the third quarter due to lower egg production, resulting in lower egg sales.
Its Food Manufacturing (FM) segment revenue grew by 284.00% on higher sales of primary and further processed poultry products.
Retail business (RB) revenue fell by 13.43% or RM8.77 million due to lower retail volume.
Overall, the group recorded higher pre-tax profit of RM74.95 million, compared with RM10.62 million in the previous period. This amount includes government subsidies received.
Looking ahead, the company said the outlook for the industry remains challenging as imported frozen chickens continue to enter the domestic market.
Despite the drop in feed costs, the ringgit continues to rise against the US dollar, with the recent exchange rate approaching 4.80.
However, the directors remain optimistic that the group will remain profitable as its business diversifies into further processing and liquid egg production.
The group’s downstream activities currently contribute 34% of revenue, compared with 25% of the group’s revenue in the previous year.
With the recent acquisition of the remaining 51% stake in Nutriplus Food Manufacturing Company, the group expects to achieve higher food manufacturing efficiency through production integration.
