Halal Industry

Malaysian halal-certified poultry producer Leong Hup second-quarter profit plunges 64.5 pct

Poultry producer Leong Hup International’s net profit plunged 64.5 per cent for the second quarter ended June 30 mainly due to weaker results in Malaysia and Singapore.

The halal-certified company’s net profit reached 26.55 million ringgit ($6.29 million) for Q2 versus 74.79 million ringgit for the same period last year, it reported in an exchange filing on Thursday.

“During the quarter, the group’s livestock segment was affected by the headwinds on the selling prices of poultry products which have spared no operators in the region,” Group CEO Lau Tuang Nguang said in a statement.

The Group’s revenue from sales of livestock and poultry decreased by about 11.8 per cent from 910.73 million ringgit in Q2 2018 to 803.66 million ringgit for Q2 this year, it said.

“The decrease was primarily due to a significant decrease in average selling price of broiler day-old chicks and broiler in Malaysia,” said the company.

“The significant decrease in revenue was also contributed by decrease in revenue in Singapore primarily due to the loss of revenue from a subsidiary, Jordon International Food Processing Pte Ltd following the disposal of this subsidiary on 30 June 2018,” it added.

The drop in revenue from Malaysia and Singapore was partially offset by a rise in revenue from Indonesia and Vietnam.

“The increase in revenue in Indonesia was mainly due to increase in sales volume of day-old chicks,” said the producer.

“Revenue in Vietnam recorded an increase due to higher sales volume of broiler despite the depressed price.”

Indonesia was its biggest market, accounting for 38.2 per cent of revenue, earning the company 563.9 million ringgit in the second quarter. Malaysia followed on 368 million ringgit, and 335.17 million ringgit from Vietnam.


The company’s feedmill business helped it compensate for the weak results in poultry.

Leong Hup’s feedmill revenue grew by 32.6 per cent to 671.27 million ringgit for the three months ended June 30 from 506.40 million ringgit in the same quarter last year.

This was due to an increase in sales volume and average selling price of livestock feed in Indonesia and Vietnam, it said.


The company’s net profit for the six months ended June 30 dropped 13.97 per cent to 116.84 million ringgit, compared to 135.8 million ringgit for H1 2018.

Its revenue from livestock and poultry-related products nudged down about 4.8 per cent from 1.75 billion ringgit in the first half of 2018 to 1.66 billion ringgit in H1 this year.

Again, its feedmill business boosted revenue, rising by 29.8 per cent from 1.01 billion ringgit to 1.31 billion ringgit.

The increase was mainly due to a rise in sales volume and average selling price of livestock feed in Indonesia and Vietnam.


The company expects its third-quarter results to be better than Q2’s, citing higher sales and investment in capacity expansion over the past year.

“Nevertheless, selling prices of poultry products may be subject to wide price fluctuations and the Company’s financial performance for the year may be affected if price recovery is not sustained, “it said.

Leong Hup declared an interim dividend of 1.6 sen per ordinary share.

($1 = 4.2221 Malaysian ringgit)

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