LB Aluminium third quarter earnings fell 78.5%

PETALING JAYA: LB Aluminium Bhd’s net profit for the third quarter ended Jan 31 fell 78.5% to RM1.22 million from RM5.68 million a year ago due mainly to reduced margins from higher raw material input costs and depressed export returns owing to the strengthening of ringgit.
The group’s revenue for the current quarter increased by 20.3% to RM136.52 million compared with RM113.47 million for the preceding year corresponding quarter mainly because of both higher business volume and average selling prices.
For the nine-month period net profit fell 60.9% to RM6.49 million from RM16.57 million a year ago, from reduced margins, especially for the export business.
The group recorded revenue of RM387.88 million, representing an increase in revenue of 13.6% compared with the preceding year corresponding period’s revenue of RM341.44 million, attributed mainly to higher average selling prices as well as higher business volume.
LB said the ringgit continued to stay firm during the quarter vis-a-vis the US dollar, which has adversely impacted its export margins given that its export are priced in US dollar and that it has increased its export by 41.1% compared to last year.
“We are working on increasing our selling prices with export customers so as to maintain our margins. The volatility of aluminium prices has added pressure on our profit margins and we are focusing on passing the increase in our raw material costs to our customers.
“As usual, we are continuously looking into our processes to improve efficiency and reduce operational costs to ensure our margins are reasonably protected,” LB said.
The board is optimistic that the group will remain profitable for the remainder of the financial year.