Teo Seng 1Q net profit plunges 91% on lower egg sale volume and prices

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KUALA LUMPUR (May 18): Teo Seng Capital Bhd said its net profit for the first quarter ended March 31, 2020 (1QFY20) slumped 91.37% to RM1.91 million, from RM22.09 million a year earlier, on lower egg sale volume and prices.

Earnings per share (EPS) for the quarter plunged to 0.65 sen, from 7.37 sen previously.

Quarterly revenue declined by 22.94% to RM115.98 million, from RM150.52 million, the group said in a filing with Bursa Malaysia.

It said its poultry farming segment posted a pre-tax loss of RM270,000 for the quarter, compared to a profit before tax (PBT) of RM28.69 million a year ago. Segmental revenue declined 28.57% to RM97.03 million from RM135.85 million.

Teo Seng blamed the lower earnings from the poultry farming segment on a fall in average selling prices (ASPs) of eggs, combined with a decline in the amount of eggs sold as a result of early depopulation of old hens.

In contrast, the group’s investment and trading segment saw its 1Q pre-tax profit rise 527% to RM3.08 million from RM491,000 last year. Revenue rose 29% to RM18.95 million from RM14.67 million.

This, the group said, came about as a result of higher demand for animal health products.

On its prospects, Teo Seng said that despite improving selling prices of eggs and its role as an essential business, things are expected to be challenging.

“Despite improving selling prices of eggs in the market and [that] the company is categorised under the essential food sector, the directors are of the opinion that the financial performance for the remaining nine months is still challenging due to uncertainty in the market,” the group said.

Teo Seng’s share price finished one sen or 0.89% higher at RM1.13 today, valuing the group at RM339.01 million. The counter saw some 356,700 shares traded.