Hup Seng’s earnings falls 20% due to lower margin

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KUALA LUMPUR (Nov 12): Confectioneries manufacturer Hup Seng Industries Bhd (Hup Seng) announced today its third quarter financial results ended Sept 30, 2014 (3QFY14), with earnings falling 20% year-on-year (y-o-y) to RM6.25 million, from RM7.78 million.

Revenue came in lower at RM55.87 million, down 4.85% from RM58.72 million in the previous corresponding quarter.

In its filing to Bursa Malaysia today, the company’s management attributed the poorer performance to lower demand compared to previous corresponding period, of which the group began experiencing since the second quarter.

Cumulatively, Hup Seng registered earnings of RM25.55 million for the nine-month period (9MFY14), 6.7% lower from RM27.39 million in its preceding corresponding period.  

Its revenue however increased 2.09% to RM188.57 million, from RM184.72 million last year.

Hup Seng says this was mainly because of higher raw material cost, which squeezed its margin.

“The group witnessed some margin compression arising from costs pressures, amid continued growth in revenue. Despite this, we will continue to build the competitiveness of our products and remain active in innovating our product portfolio,” Hup Seng said in its quarterly financial report today.

Its share price increased 1.5 sen or 1.54% to 99 sen today, giving it a market capitalization of RM792 million.