KUALA LUMPUR (Nov 28): Lay Hong Bhd's net profit dropped 59% to RM3.54 million or 5.85 sen per share in the second quarter ended Sept 30, 2016 (2QFY17) from RM8.56 million or 16.64 sen per share in the previous year.

In its filing to the bourse today, the group said the decline in profit was due to a gain on disposal of a subsidiary company recorded in the previous year and also advertising and promotional expenses for new product launches during the quarter.

Revenue for the quarter rose 4% to RM170.98 million from RM164.75 million a year earlier.

"This was due to the higher egg prices and higher quantity of eggs sold in the current quarter," it said.

Net profit for the cumulative six-month period (1HFY17) fell 64% year-on-year to RM3.96 million from RM11.14 million, while revenue rose 3% to RM329.93 million from RM319.3 million.

Going forward, Lay Hong said it will be reviewing its strategies with the entry of NH Foods Ltd as a substantial shareholder, which it said is a major step forward for its chicken product manufacturing business.

"The company is now reviewing its strategies and will capitalise on the strength of NH Foods to take the company to greater heights. A new JV (joint venture) company under the name of NHF Manufacturing (Malaysia) Sdn Bhd has been set up and is now actively working on its plant set-up and product development.

"The initial range of products [is] expected to be launched before the end of the calendar year," said the group.

Lay Hong fell 1 sen or 1.23% to close at 80 sen, giving it a market capitalisation of RM487 million.