KUALA LUMPUR: The weak ringgit is eating into profits at Lay Hong Bhd, but the poultry producer expects higher egg prices in the coming months to lift its performance.
The company, in a filing with Bursa Malaysia on Monday, said the ringgit’s slump has resulted in a significant 8% jump in feed cost during the three-month ended Sept 30.
This, coupled with one-time “early retirement” of its layer birds and prudent measures taken to control the spread of bird flu virus in Sabah, contributed to the loss of RM10.96mil in the second quarter.
“The continuous strengthening of the US dollars against the ringgit have caused all imported raw and packing materials particularly the feed cost to rise which will impact profitability going forward,” Lay Hong said.
The group, however, expects egg prices to rise in the coming quarters on lower supply. Lay Hong said the industry has decided to reduce production in order to “regularise” the over supply situation experienced in the recent quarter.
“For the liquid egg business, the commissioning of the equipment in the new plant in Johor is progressing as per schedule,” it said.
Meanwhile, the group expects a boost from a newly opened joint venture manufacturing facility with NH Foods Ltd.
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