Friday 21 Jun 2024
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KUALA LUMPUR (May 6): Rubber processor and exporter Seng Fong Holdings Bhd's net profit jumped more than threefold in its third quarter, thanks to higher sales volume and average selling prices.

It said its net profit for its 3QFY2024 ended March 31 surged to RM15.14 million from RM4.05 million a year earlier, while revenue jumped 39.2% to RM300.32 million from RM215.72 million.

The company declared a third interim dividend of 1.5 sen per share, payable on June 19. Year to date, the company has declared a total dividend of four sen, compared with 2.5 sen in the corresponding period in 2023.

The group's share price hit its all-time high of RM1.22 during trading hours on Monday, before settling at RM1.18, one sen or 0.85% higher from Friday's close. At RM1.18, the group is valued at RM639 million.

Year to date, the counter has gained 42 sen or 55.26%. The strong 3Q results came after the group posted its best quarterly earnings in 2QFY2024 with a net profit of RM17.4 million.
 
For its nine months ended March 31 (9MFY2024), the company reported a net profit of RM40.84 million, double the RM19.62 million it made in the corresponding period in 2023, as revenue grew 15.6% to RM807.35 million from RM698.18 million.

There has been higher consumption of natural rubber due to the growth of the automotive industry, led by the growth of electric vehicles in the US and China, Seng Fong said.

As such, it expects to expand its annual capacity by 14.5% to 190,000 MTS for FY2024, compared with 166,000 MTS in FY2023, by increasing the production hours across all three of its factories.

The group is also planning to install smart rubber manufacturing equipment at a total cost of RM26.1 million in all its factories to automate its manufacturing process. An initial payment of RM2.7 million has been made to its vendor Guangdong Ruobo Intelligent Robot Co Ltd using internal funds, the group said. The balance will be paid using proceeds from its private placement announced in February this year.

While flagging that the anticipated US Federal rate cut will affect foreign exchange movements, the group — which saw its revenue come mainly from customers in China, Hong Kong and Singapore — remains cautiously optimistic about achieving sustainable growth and good financial performance for FY2024.

Edited ByTan Choe Choe
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