KUALA LUMPUR (May 21): Latitude Tree Holdings Bhd suffered a 79.1% year-on-year drop in net profit to RM2.4 million for its third quarter ended March 31, 2018 (3QFY18), from RM11.52 million a year ago, hit by a drop in orders received and higher costs, besides unfavourable foreign exchange rates.

This brought the furniture maker’s earnings per share as at end-March down to 2.47 sen, from 11.85 sen in the same quarter last year.

Quarterly revenue fell 12.2% to RM164.5 million, from RM187.27 million registered in 3QFY17, its bourse filing today showed.

As for its nine-month period (9MFY18), Latitude Tree said net profit decreased 60.5% to RM25.49 million compared with RM64.61 million in the same period a year ago.

Cumulative revenue fell 4% to RM578.11 million from RM602.04 million registered in 9MFY17, due to lower orders received by its furniture plants, coupled with the effect of a weaker US dollar against the ringgit.

In the filing, the group said the lower profit was in line with the decrease in revenue, besides the fact that it also incurred higher finance expenses and raw material costs, especially rubber wood sawn timbers, during the quarter under review.

The manufacturer said it sold more of the lower margin products, and paid more for labour costs in its Vietnam plants due to the increase in minimum wages there.

The situation was not helped as it recorded foreign exchange losses of RM8.8 million compared to a foreign exchange gain of RM6.8 million in the same quarter last year, it added.

The group however remains confident that it will continue to be profitable in FY18.

“In view of the group revenue and profitability reduced across the board, the group will continue to address the various challenges including rising material costs, labour costs, forex volatility and competition from manufacturers in Vietnam,” it shared.

Shares in Latitude Tree were three sen or 0.84% higher at RM3.61 as at end of today's trading session, valuing it at a market capitalisation of RM348 million.