While Egg Producers Thrive, Broilers are Deprived

MALAYSIA - Companies that rear chicken, called broilers, for their meat generally faced a financial famine in the first quarter, while those that produced eggs had a financial feast.
calendar icon 6 July 2009
clock icon 3 minute read

It was a surprise that broiler companies suffered losses because consumers felt the pinch of high prices for chicken during this period, and feed costs had come off from record levels.

Farm’s Best Bhd, a broiler producer, said in its results statement there was a decrease in selling prices and the economic slowdown apparently caused "consumption contraction at the retail level."

The company reported a loss of RM2.6 mil in the quarter ended 31 March compared with a net profit of RM260,000 in the previous corresponding quarter, reports The Star.

Leong Hup Holdings Bhd, one of the country’s biggest broiler producers with annual sales of over RM1bil a year, also attributed its loss to a decrease in the selling prices of broiler chicken and day-old chicks.

The company’s loss widened to RM9.3 mil in its latest quarter from a loss of RM1.6 mil a year ago.

Leong Hup said in its results statement that with the recent improvement in selling prices, it expects a satisfactory performance in its current financial year ending 31 March 2010.

In the egg producing sector, QL Resources Bhd is one of the biggest players even though it is diversified with other agro-based interests in fishing and oil palm plantations.

The company maintained a relatively high pre-tax profit of RM14.8 mil in its fourth quarter, comparable with RM14.4 mil in previous corresponding quarter.

Its managing director Chia Song Kun said egg prices were high, averaging at an ex-farm price of 28 sen each for grade A eggs in the quarter ended 31 March.

"But prices have come down since March. They are now 26 sen, ex-farm, down 2 sen," he told StarBiz.

LTKM Bhd, which is focused on producing eggs, also produced strong earnings in contrast with the losses of broiler chicken producers.

Its net profit grew to RM4.9 mil in the fourth quarter ended March 31 compared with RM1.5 mil a year ago.

Teo Seng Capital Bhd, a unit of the Leong Hup group, also produced healthy profits. Its net profit was RM5.5mil in the quarter ended 31 March. There are no comparable results last year as the company was just listed late last year.

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