KUALA LUMPUR (May 27): Lion Forest Industries Bhd dipped into the red for the third quarter ended March 31 (3QFY15), recording a net loss of RM57.81 million from a net profit of RM16.90 million a year earlier.

Revenue stood lower at RM533.83 million in 3QFY15, from RM571.05 million the year before.

The company said on Bursa Malaysia that it recognised exceptional losses totalling RM71.1 million, comprising a one-time loss of RM70 million on the full and final settlement of the litigation claim by UNP Plywood Sdn Bhd against Sabah Forest Industries Sdn Bhd, a former subsidiary company, and an impairment loss on quoted and unquoted investments of RM1.1 million.

The company said its 7% decrease in revenue was due to the lower sales of steel related products.

Lion Forest’s building materials and steel products division recorded a 9% lower revenue of RM451.2 million as compared with the preceding year, due to the lower demand for steel related products from the local steel producers.

Its transportation business, investment holding and agriculture businesses also collectively contributed a lower profit of RM2.2 million, as compared with RM3.2 million in the preceding year, mainly due to the lower contribution from the transportation business and lower interest income.

Meanwhile, the company’s lubricants, petroleum and automotive products division grew 18% and 24% to RM65.8 million and RM10.4 million respectively, due to higher sales of lubricants.

Lion Forest (fundamental: 1.65; valuation: 0.90) noted in its financial notes that the outlook for the next quarter will continue to be challenging, due to uncertainties in the operating environment.

“Nonetheless, we remain focused on growing our business network and developing our product range with effective cost management and operational efficiency initiatives, and rationalising our agriculture activities to sustain profitability,” it said.