KUALA LUMPUR: There are signs Seng Fong Holdings Bhd
's efficiency gains in its operations are leading to sustainable, long-term margin growth, rather than a one-off gain, said executive director Jimmy Er Tzer Nam.
"Our fourth-quarter results show the efficiency gains we have been building into our operations are paying off.
"The improvement in profitability was underpinned by better production efficiency from our automation initiatives, cost savings from our in-house logistics operations, and a stronger mix of premium-grade products," he said in the group's announcement of its latest quarterly result.
In the fourth quarter ended June 30, 2026, Seng Fong recorded a net profit of RM12.45mil, nearly four times the net profit of RM3.46mil in the year-ago quarter. Gross profit margin nearly doubled to 7.6% from 3.8% while earnings per share scaled higher to 1.72 sen from 0.48 sen previously.
The improved bottomline came despite quarterly revenue dropping to RM228.84mil from RM367.56mil in the year-ago quarter, as ongoing political tensions led to longer logistic lead times.
For the full financial year, Seng Fong's net profit came to RM8.06mil, a decline from RM35.15mil in the previous year. Revenue was also lower in FY26 at RM1.05bil compared to RM1.49bil in FY25.
The natural rubber processer and exporter said its outlook was supported by its 51% acquisition of Rainbow Rubber Buying Center Ltd in Ghana, which opens direct access to raw materials which would contribute to higher production outputs.
It also had inventories built up to RM158.6mil as at June 30, 2026, from RM125mil a year earlier, which provides a buffer against short-term market disruption.
The group said its diversification comes as Indonesia, the world's second-largest natural rubber producer, sees a growing number of smallholders converting rubber plantations to oil palm amid a prolonged rubber price slump. Industry observers say the shift could tighten global rubber supply over time.
Seng Fong believes its expanded raw material sourcing base in Ghana, together with higher inventory levels, positions it to weather near-term market volatility better than its peers which rely on a single sourcing region.
"Barring unforeseen circumstances, the board remains cautiously optimistic on the Group's prospects and is confident of declaring a dividend in the financial year 2027," it said.
