KUALA LUMPUR (Feb 18): Natural rubber processing company Seng Fong Holdings Bhd (KL:SENFONG) reported a 49.4% decline in net profit to RM8.81 million for the second financial quarter ended Dec 31, 2024 (2QFY2025), compared with RM17.40 million a year earlier, attributable to higher average raw material costs, which outpaced the increase in average selling prices.

This was despite a nearly 26% increase in revenue to RM361.99 million, from RM287.64 million previously, mainly driven by its processing segment, the company said in a filing on Bursa Malaysia.  Earnings per share (EPS) stood at 1.22 sen, down from 2.41 sen in 2QFY2024 and from 1.97 sen in 1QFY2025.

The board declared a second interim single-tier dividend of one sen per share, amounting to RM7.22 million, payable on April 11, 2025, with an ex-date of March 13, 2025. This brought its cumulative dividend declared for the financial year to 2.25 sen per share.

China remained its largest market, contributing 45.9% of revenue, followed by Singapore (38.7%) and Hong Kong (13.6%).

For the first half of FY2025 (1HFY2025), net profit dropped 12.4% to RM22.51 million from RM25.70 million in the previous corresponding period, while revenue expanded 42.4% to RM721.93 million from RM507.04 million. The higher revenue was driven by a 7% increase in sales volume and higher average selling prices.

Seng Fong said it remains focused on cost efficiency and customer base expansion while progressing with its automation initiative, which is expected to reduce future labour costs.

"The group expects to reduce a significant number of foreign workers in the production department after the implementation of automation in manufacturing processes that will translate savings in the future operation costs," it said.

The company’s shares closed at 95 sen on Tuesday, giving it a market capitalisation of RM685.57 million.