KUALA LUMPUR (Aug 25): Leong Hup International Bhd’s net profit grew marginally by 1.13% to RM16.27 million, or 0.45 sen per share, for the second quarter ended June 30, 2020 (2QFY20) compared with RM16.09 million, or 0.46 sen per share, in the previous corresponding quarter.

Quarterly revenue fell 4.16% to RM1.43 billion, from RM1.48 billion previously, according to the group’s filing with Bursa Malaysia.

The integrated poultry producer, however, cut its dividend. It declared an interim single tier dividend of 0.55 sen per share amounting to RM20.075 million, payable on Sept 30, 2020. This is 66% lower compared with 1.6 sen per share a year ago.

Compared with the preceding quarter, the group’s net profit contracted by 25.34% in 2QFY20 against RM21.79 million in 1QFY20, while revenue was flat at RM1.43 billion.

Leong Hup said Indonesia continues to be the group’s largest contributing segment, accounting for 31.4% of revenue for the quarter, followed by Vietnam (27.2%) and Malaysia (27%).

The remainder of its revenue was made up of contributions from Singapore (12.8%) and the Philippines (16%).

For the six-month period ended June 30, 2020, Leong Hup’s net profit halved to RM38.06 million or 1.04 sen per share, from RM76.67 million or 2.21 sen per share in the previous corresponding period, while revenue inched down by 4.16% to RM2.86 billion, against RM2.98 billion previously.

Its group chief executive officer Tan Sri Francis Lau Tuang Nguang said at the height of the pandemic in April, the resulting movement restrictions orders imposed by the government had adversely impacted demand, with rippling effects on the industry supply chain.

“As a result, our performance during the second quarter of 2020 was marred but I am heartened that the group still remained profitable during these challenging times.

“We are fortunate as our operations have been unimpeded throughout the period of movement controls. A bright spot has been the resilient performance of our Vietnam operations which continue to outperform the country’s growth rate, while our Malaysia operations bounced back quickly during the quarter. This underscores our advantage as a geographically diversified poultry integrator,” Lau commented in a statement.

“Although we expect headwinds to persist, substantial resumption of many economic sectors in our markets have so far bode well for the group. While we have no control over external factors, we continue to undertake efficient capital management measures and remain proactive to capture opportunities when the market recovers,” he added.

Leong Hup shares closed unchanged at 83 sen, valuing it at RM3.03 billion. The stock almost doubled year-to-date from 43 sen at end-2019.

Edited by Kathy Fong