KUALA LUMPUR: Furniture maker Poh Huat Resources Holdings Bhd posted a higher net profit in the third quarter ended July 31, as revenue jumped on rising demand from buyers in the US.
Earnings rose 22% to RM11.27mil, or five sen a share on the back of a 14% jump in turnover to RM164.8mil.
The company, which produces office furniture and bedroom sets at factories in Malaysia and Vietnam, has declared a second interim dividend payout of two sen share.
"As in previous quarters, our Malaysia operations continued to receive sustained orders for our panel-based bedroom sets from our customers in the US," the company said in a statement today.
"During the quarter, we also received substantial increase in orders from one of our major office furniture customers." Meanwhile, Poh Huat's operations in Vietnam posted an 11.5% sales growth, also driven by orders from the US.
"For the global furniture trade, Vietnam is expected to benefit the most, with furniture exports increasing by 30% this year, followed by Malaysia as orders shift to these South East Asia exporters," Poh Huat said.
The company sees "permanent structural changes in the supply chain" growing from the trade tension between the US and China that are forcing manufacturers to relocate out of China.
"We have adapted our production activities to accommodate a wider range of products for our US customers," it said.
"We are beginning to see improved operational results, particularly from Vietnam where we have enjoyed smoother production runs," it added.
The US first slapped a 10% tariff on furniture imports from China in September last year.
The tariff has been raised to 25% since June 2019 and will be further increased to 30% from December.
"As furniture exports from Malaysia are spared the tariff, this translates to a tremendous price advantage for Malaysian furniture exporters over their Chinese peers in the US market," AmInvestment Bank said in a report earlier this week.