KUALA LUMPUR (Aug 30): Egg producer Lay Hong Bhd, whose brands include Nutriplus and Wise Choice, saw its net loss widen to RM14.35 million in its first financial quarter ended June 30, 2022 (1QFY22) from RM7.46 million in the preceding quarter due to a 3.2% quarter-on-quarter decline in revenue to RM229.43 million in the current quarter.

On a year-on-year basis, the group slipped into the red compared with a net profit of RM5.19 million in 1QFY21. As a result, it recorded a loss per share of 2.17 sen for 1QFY22, compared with an earnings per share of 0.79 sen for 1QFY21.

Quarterly revenue was lower by 3.7% in 1QFY22, from RM238.19 million in 1QFY21.

In a bourse filing today, Lay Hong attributed the quarterly loss to the decrease in average selling prices (ASPs) of table eggs and the lower production of processed chicken products due to shorter operating days, where its plant was undertaking maintenance, together with the restriction of workforce from 100% to 60% upon imposition of the Enhance Movement Control Order (EMCO) throughout the country.

"The increase in raw material cost of our major components, namely corn and soya bean, have also negatively impacted the overall profitability," it said.

On prospects, Lay Hong said the continuing high price of raw materials, especially its two major components, namely corn and soya bean in the world commodities market, has posed a great challenge to the group to contain cost.

"With the ongoing Covid-19 pandemic getting more worrisome, especially the Delta variant, the demand for chicken products and liquid eggs, especially for the industrial segments, are getting tougher due to their reduced offtake affected by EMCO closure that led to their reduced production output and thus, directly influencing the overall ASPs of our products to the market," it added.

Taking cognisance of the ongoing tough operating environment, Lay Hong said it will take appropriate mitigating measures to address it and ensure that the group will be able to strive through these trying times.

Lay Hong shares closed up 0.5 sen or 1.67% at 30 sen today, bringing a market capitalisation of RM201.39 million. Its share price has fallen 17.57% year to date.