通告

As disclosed in LHI’s Prospectus dated 25 April 2019, a number of factors affect the Company’s financial condition and results of operations which include, among others, the selling prices of LHI’s products sold on the open market.

The Company wishes to inform its shareholders and potential investors that based on the preliminary review of the unaudited financial results of the Company and its subsidiaries (“Group”) for the financial period ended 30 June 2019, the Company expects the Group to record significantly lower profits after taxation for the 2Q2019 in comparison with the 2nd quarter of 2018 (“2Q2018”) due to a significant decline in the average selling prices (“ASP”) in most of the products sold by the Group, particularly in Malaysia, as follows:

• The ASP of the Group’s broiler day-old-chicks (“DOC”) in Malaysia in 2Q2019 was RM1.21 per DOC, representing a decline of 38.6% from RM1.97 per DOC in 2Q2018. The selling price of the Group’s broiler DOC in Malaysia declined to as low as RM0.90 per DOC in 2Q2019. In comparison, the lowest selling price of the Group’s broiler DOC in 2Q2018 was RM1.60 per DOC; and
• The ASP of the Group’s broiler chicken in Malaysia in 2Q2019 was RM3.99 per kg, representing a decline of 14.7% from RM4.68 per kg in 2Q2018. The selling price of the Group’s broiler chicken in Malaysia declined to as low as RM2.60 per kg in 2Q2019. In comparison, the lowest selling price of the Group’s broiler chicken in 2Q2018 was RM3.90 per kg.

As the Group’s operating costs are relatively stable, the weaker ASP in 2Q2019 will affect the Group’s margins and profitability. As at 5 August 2019, the market prices of broiler DOC and broiler chicken are RM2.00 per DOC and RM5.00 per kg respectively.

The overall sales volume of the Group’s products increased in 2Q2019 compared to 2Q2018. The total sales volume of livestock feed, broiler DOC, broiler chicken and eggs increased in 2Q2019 by 13.9%, 8.1%, 10.7% and 5.9% to 583,665 metric tonnes, 123 million broiler DOC, 31 million broiler chickens and 430 million eggs, respectively, in comparison with 2Q2018. Despite the volume growth, the Group’s profits were affected as a result of the significant decrease in the ASP.

Details of the Group’s financial performance for 2Q2019 will be available when the Company announces its unaudited consolidated financial results for the financial period ended 30 June 2019.

The press release by the Company dated 9 August 2019 is attached.

This announcement is dated 9 August 2019.

Announcement Info

Please refer attachment below.