KUALA LUMPUR (Nov 20): Kawan Food Bhd’s (KL:KAWAN) net profit for the third quarter ended Sept 30, 2024 (3QFY2024) fell 87.5% to RM960,000 from RM7.69 million in the same quarter last year (3QFY2023), dragged by unrealised foreign exchange (forex) losses due to the weakening of the US dollar against the ringgit, and a higher tax charge.

The group, which manufactures frozen Asian food delicacies for both the domestic and export markets, recorded an income tax expense of RM3.93 million for 3QFY2024, as opposed to just RM895,000 in 3QFY2023, as its effective tax rate for the quarter under review was higher than the statutory tax rate due to lower reinvestment allowance and expenses that were disallowed for tax purposes.

Revenue, however, rose 12.2% to RM88.9 million from RM79.2 million in 3QFY2023, mainly contributed by the export market, driven by rising demand in Europe and North America markets.

It declared a second interim dividend of 2.8 sen per share, to be paid on Dec 20, raising its year-to-date payout to seven sen, as opposed to 3.6 sen last year.

For the first nine months of 2024, the group's net profit fell 12.6% to RM18.6 million from RM21.2 million in the corresponding nine months last year, though revenue rose 12.7% to RM254.4 million from RM225.8 million.

“In spite of the recent heightened geopolitical tensions and global economic uncertainties, the group's business remains positive. We will remain vigilant to the wider geopolitical-economic movements and strive to adapt market shifts,” the group said.

Kawan Food’s share price slipped one sen or 0.59% to close at RM1.68 on Wednesday, valuing the company at RM611.37 million. The stock is down 13 sen or 7.18% year to date.