Apollo Food's 2Q profit slumps 55% as sales fall, costs rise

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KUALA LUMPUR (Dec 29): Apollo Food Holdings Bhd's net profit fell 55% to RM4.29 million in its second quarter ended Oct 31, 2016 (2QFY17) from RM9.64 million a year ago, on weaker sales and higher raw material costs.

Revenue fell 11% to RM48.13 million from RM53.8 million a year ago, as it recorded lower sales in both its local and overseas markets, Apollo Food's bourse filing today showed.

The decline in overseas sales had also weakened both realised and unrealised foreign exchange gains earned during the quarter, the company said.

For the cumulative six months ended Oct 31, 2016 (1HFY17), its net profit dropped 52% to RM9.99 million from RM20.83 million in the same period last year, though revenue only dipped 5% to RM98.11 million from RM103.73 million.

"In view of the increase in costs of raw materials and the volatility of the ringgit against foreign currencies, the group expects its operating environment to be tougher in both the current and coming financial years," said Apollo Food, adding the market will continue to remain competitive.

Nevertheless, it said its board is confident the group will be able to maintain its market position by implementing prudent measures and improving operational efficiency, and achieve satisfactory results in the coming year.

Shares of Apollo Food fell 5 sen or 0.9% to close at RM5.40 today for a market capitalisation of RM436 million.