KUALA LUMPUR (Dec 11): LB Aluminium Bhd’s net proft for the second quarter ended Oct 31, 2017 (2QFY18) fell 71% year-on-year to RM1.67 million, from RM5.78 million, on reduced margins because of higher raw material input costs.

This was further compounded by the group’s lower other operating income, which declined to RM1.69 million, from RM2.54 million y-o-y, as a result of lower foreign exchange gain and lower amount of reversal of impairment loss on receivables during the quarter.

Earnings per share declined to 0.67 sen, compared to 2.32 sen last year, its Bursa Malaysia filing today showed.

Quarterly revenue, however, grew 7% y-o-y to RM126.94 million, from RM118.28 million, because of higher average selling prices, due to a significant rise in raw material costs, particularly aluminium.

The revenue from export business grew 44% to RM38.92 million, driven by better performance in Canada, Singapore and China.

For the cumulative six months period (6MFY18), net profit fell 52% to RM5.27 million, from RM10.89 million a year ago — again mainly because of reduced margins due to higher raw material costs. Revenue rose 10% to RM251.36 million, from RM227.97 million, as it recorded higher average selling prices, while export business grew.

Looking ahead, LB Aluminium said it has taken cognisance of the heightened supply-demand imbalances in the property market that was highlighted by Bank Negara Malaysia, and is strategising to mitigate the potential adversity by focusing on the export market, and possibily product diversification.

“Rising operating costs, particularly raw material costs, continue to be a concern to the group, so operational efficiencies remain a priority,” the filing added.

Nevertheless, its board is optimisitic that the group would remain profitable for the remaining financial year ending April 30, 2018 (FY18).

LB Aluminium shares dipped 1.5 sen or 2.24% to 65.5 sen today, for a market capitalisation of RM162.76 million.