PETALING JAYA: The government’s egg subsidy will help to mitigate high farming costs, says a “cautiously positive” QL Resources Bhd.
The agri-food player, whose net profit rose nearly 31% in the latest second quarter ended Sept 30 (2Q24), expects its “satisfactory” business performance to continue in the upcoming quarter.
This is despite the high interest rate environment and uncertain global economy outlook.
In the 2Q24, QL Resources reported a net profit of RM122.64mil, as compared to RM93.9mil in the corresponding quarter of previous year.
This widened the basic earnings per share to 5.04 sen. Revenue for the period rose by 3.17% year-on-year (y-o-y) to RM1.69bil.The group’s integrated livestock farming segment witnessed higher volume and selling price for farm produce in the quarter under review.
However, its current quarter sales decreased marginally against the corresponding quarter mainly due to lower trading volume and unit selling price for feed raw material.
Earnings, on the other hand, increased by 93% against the corresponding quarter mainly due to improved feed raw material trading margin with lower unit cost as well as strong performance of its domestic farming operations as well as improvement in Indonesia farming operations.
In addition, high input costs were partly mitigated by continued government cost subsidies.
The marine product manufacturing segment’s quarterly sales increased marginally against the corresponding quarter mainly due to better performance of fishing activities and fishmeal with good fish landing as well as sustained demand for surimi-based products albeit weaker performance of surimi with stiff market competition internationally.
Earnings were marginally better than the corresponding quarter in line with the sales increase.
“Palm oil and clean energy segment’s sales increased by 14% against the corresponding quarter mainly due to higher project progress in BM Greentech Bhd.
“In addition, palm oil activities benefited from higher fresh fruit bunch tonnage produced and processed as well as higher crude palm oil sales delivery despite lower selling price.
“Earnings were significantly higher against the corresponding quarter mainly due to higher sales and project margin recovery at BM GreenTech.
“In addition, improvement registered in palm oil activities with higher yield from plantations, better oil extraction rates as well as improved milling efficiency,” QL Resources said in a filing with the stock exchange.
Its convenience store chain segment –FamilyMart retail chain – saw sales increased by 23% against the corresponding period mainly due to 60 new stores opening as well as additional FM Mini set-up during the period.
Earnings increased by 16% in line with higher sales but higher operating cost resulted in margin erosion.