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Tuesday, March 20, 2018

Poh Huat shares drop 15% as Q1 net profit slumps

Tuesday, 20 Mar 20189:30 AM MYT

KUALA LUMPUR: Poh Huat Resources Bhd dropped more than 15% in early trade after the company reported a 64.7% decline in net profit for the first quarter ended Jan 31, 2018.

Shares of the company opened the day on a disappointing note and further declined 15.13%, or 23 sen to RM1.29, its lowest in more than a year. It is currently the top losers on Bursa Malaysia.

Poh Huat’s net profit in the first quarter ended Jan 31, 2018 (1QFY18) plunged 64.69% to RM6.24mil from RM17.67mil a year ago, due to margin compressions in both its Malaysian and Vietnamese operations.

Its quarterly revenue was down 1% on year to RM161.89mil as compared with RM163.46mil a year ago.

Going forward, the group expects a positive macroeconomic outlook for the home furnishing industry, although ‘signs of softness’ in the US housing market could dampen prospects.

The progressive decline of the US dollar against the ringgit has also adversely impacted profit margins, Poh Huat said.

“We will have to work closely with our customers to mitigate increases in raw material prices, labour costs and pricing adjustments to reflect recent changes in the US dollar to ringgit exchange rate," it added.


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