KUALA LUMPUR (March 24): Furniture manufacturer Poh Huat Resources Holdings Bhd's net profit for the first quarter ended Jan 31, 2022 (1QFY22) surged 59.43% to RM15.35 million from RM9.63 million a year ago, driven by better profit margins.

Its revenue for 1QFY22, however, declined 0.38% to RM182.96 million from RM183.66 million a year earlier, its filing with Bursa Malaysia showed.

The company did not declare any dividend for the latest quarter.

It said following the production halts under the nationwide full Movement Control Order 3.0 (FMCO 3.0), its Malaysian factories resumed operations on Sept 11, 2021, and production activities recovered from October 2021 onwards with its workforce returning to normal level.

Its productions and shipments were higher compared with in the previous year's corresponding reporting period as it ramped up production to fulfil orders from US importers, which were placed during FMCO 3.0.

In Vietnam, the group recorded a similar recovery in production and shipment levels following the resumption of operations at both its manufacturing facilities in Binh Duong and Dong Nai districts in mid-October 2021.

While production activities were in full swing, it said shipments were lower due to logistic disruptions and higher shipping rates which delayed some shipments.

Nonetheless, as production activities are back to normal levels, Poh Huat said its operational results have recovered at Malaysian and Vietnamese facilities.

In particular, higher shipments from its Malaysian operations resulted in a significant improvement in gross profit from RM8.88 million in the previous corresponding reporting period to RM16.72 million in the current reporting period.

Despite lower shipments of furniture, its Vietnamese operations also enjoyed better profit margins, as it consumed buffer raw materials which it managed to source earlier at relatively lower costs.

Overall, the group's gross profit improved from RM28.36 million in the previous year's corresponding period to RM35.64 million for the current reporting period.

Going forward, Poh Huat said it is working closely with all stakeholders in ensuring stability in its supply chain, resumption and continuity of its manufacturing operations and rescheduling order shipments to its customers so that the interests of all stakeholders are safeguarded.

"As before, our priorities are now on balancing the safety and welfare of our staff while mitigating operational costs to ensure our business viability," it said.

While demand for furniture remains strong, it highlighted that movement restrictions and concerns over the continued high cases and more contagious variants remain, and that the group continues to face challenges in manpower.

"This has caused a profound impact on the stability and sustainability of our supply chain which leads to shortages of supply and higher material costs," it said.

Poh Huat shares closed three sen or 2.11% lower at RM1.39, valuing the group at RM395.18 million.