KUALA LUMPUR (Aug 27): Integrated livestock farming company Lay Hong Bhd’s first quarter net profit dropped 48% to RM2.28 million, from RM4.42 million a year ago, due to higher feed cost arising from rising exchange rate.

Earnings per share for the first quarter ended June 30, 2018 fell to 0.36 sen from 0.73 sen previously, the group said in a filing with the stock exchange.   

Quarterly revenue increased 9% to RM199.25 million from RM183.04 million a year ago.

Lay Hong attributed the revenue increase to higher quantity of eggs sold resulting from the completion of a new farm that increased the production capacity to three million eggs per day.

A higher quantity and price of processed frozen products and pasteurized liquid eggs sold also contributed to better revenue, it said.

Moving forward, Lay Hong said the average egg price is expected to be normalised in the coming quarter after industry players decided to reduce production in order to regularise the oversupply situation experienced in the recent quarter.

“For the liquid egg business, the commissioning of the equipment in the new plant in Johor is progressively as per schedule and the construction of the manufacturing facility for the joint venture company with NH Food Ltd is also on time and is expected to be operational by the fourth quarter,” it added.

As for the exchange rate, it noted that the recent strengthening of the US dollar against the ringgit has caused all imported raw and packing material, particularly the feed cost, to rise. This, it added, will impact profitability going forward.

Lay Hong’s shares closed down 1.5 sen or 2.5% at 58.5 sen today, with 8.19 million shares traded for a market capitalisation of RM384.22 million.