KUALA LUMPUR (Feb 27): Poultry, egg and livestock feed producer Leong Hup International Bhd (LHI) posted record earnings and revenue in 2023 on the back of improved profits in the feedmill segment, driven by higher average selling prices and reduced raw material costs across Vietnam, Indonesia, and the Philippines.

This is despite its fourth quarter net profit falling 10.04% to RM81.6 million from RM90.71 million a year earlier, due to margin compression from lower price of broiler chickens in Malaysia, the Philippines and Vietnam.

Earnings for the fourth quarter ended Dec 31, 2023 (4QFY2023) fell although the group recognised government subsidies totalling RM103 million, versus RM24.9 million in 4QFY2022.    

Earnings per share dropped 2.24 sen from 2.49 sen for 4QFY2022.

Quarterly revenue rose 3.92% to RM2.41 billion from RM2.32 billion a year earlier, on the back of higher average selling price and sales volume of broiler chickens and higher sales volume of day-old-chicks (DOC) in Indonesia and higher sales volume of dressed chickens in the Philippines.

For the full year, however, LHI managed to register a record net profit and revenue. Net profit rose 37.85% to RM301.74 million from RM218.89 million in FY2022, while revenue gained 5.49% to RM9.54 billion from RM9.04 billion.

LHI said that besides improved earnings in the feedmill segment, the higher net profit was also due to better margins from better average selling prices amid improved sales mix in Malaysia's livestock and poultry segment.

“We are pleased to have achieved the highest profit ever for the group with Ebitda [earnings before interest, tax, depreciation and amortisation] of RM1.04 billion and Patmi of RM301.74 million," the group said in a statement.

“During the year, the group had reduced its borrowings by RM574.63 million and lowered its net gearing ratio to 0.59 times. This provides the group with a strong financial position to capture potential opportunities in our operating markets,” LHI executive director cum group chief executive officer Tan Sri Lau Tuang Nguang said in the statement.

“As we enter into 2024, lower inflation outlook and expected reduction in interest rate would stimulate demand. Poultry is a relatively affordable source of protein, therefore we are confident that the industry will continue to thrive,” he added.

Leong Hup shares closed down one sen or 1.4% to 71.5 sen on Tuesday, bringing the group a market capitalisation of RM2.61 billion.