KUALA LUMPUR (Sept 25): Poh Huat Resources Holdings Bhd's third quarter net profit slipped 3.4% to RM9.66 million or 4.52 sen per share, from RM9.99 million or 4.68 sen per share a year ago, due to foreign exchange losses.

In a stock exchange filing, Poh Huat said it recorded forex losses totalling RM80,000 in the quarter ended July 31, 2017, compared with forex gains of RM1.5 million previously.

Revenue rose 20.6% to RM151.48 million, from RM125.65 million in the previous corresponding quarter, as a result of higher shipping volume for both the group's Malaysian and Vietnamese operations.

For the cumulative first nine months of the current financial year, Poh Huat posted a net profit of RM37.93 million or 17.76 sen per share, an improvement of 35.4% compared with RM28 million or 13.12 sen per share recorded over the same period of the previous year.

Revenue for the nine months rose 15.5% to RM442.58 million from RM383.17 million previously.

Poh Huat said that in line with the sustained demand for furniture in the US market, its operations continued to enjoy strong orders from customers from the US for both the office and home segments.

The group said shipment of its new ranges of panel-based home products from its Malaysian operations to the US has ramped up over the last nine months as efficiency improves.

In Vietnam, the group also commenced shipment of several newer ranges of bedroom sets, for which production runs are expected to smoothen over the next few months. Overall, the group said it expects this trend to continue for the remaining financial year.

Still, Poh Huat said while the demand for its products continued to be strong, it faces challenges both in its operations and the marketplace.

"We have always experienced escalating raw material and labour costs to global inflationary pressure. While we strive for higher manufacturing efficiency, we have limited ability to control or influence on external supply and costs pressure and to keep our operating costs low," it explained.

"Competition in the market place has also turned keener as consumers demand for trendier and more competitively priced items," it added.

Poh Huat also said it has experienced downward pricing pressure on its products due to competition from other manufacturers.

"Furniture also has to cater for changing demographics particularly for millennials and younger families who have lower spending power and [who] are more comfortable with online purchases and ready-to-assemble products," the group said.

"We have aligned ourselves to respond to these changes by working closely with our customers to develop trendier, market oriented products for the marketplace," it added.

Poh Huat's share price closed 7 sen or 3.7% higher at RM1.96, valuing the group at RM417.14 million.