SINGAPORE (May 11): LY Corporation, the Malaysian-based manufacturer and exporter of wooden bedroom furniture, has posted losses of 2.8 million ringgit ($0.9 million) for the 1Q ended March, compared to earnings of 10.4 million ringgit a year ago.
This was mainly due to one-off initial public offering (IPO) expenses of 6.8 million ringgit.
1Q18 revenue edged up by 1.8% to 85.1 million ringgit, from 83.6 million ringgit a year ago.
This was mainly due to an increase in the number of 40-ft containers sold in 1Q18 on the back of an increase in the demand from customers mainly from the US.
However, gross profit fell 24.9% to 15.1 million ringgit in 1Q18, as gross profit margin dropped 6.3 percentage points to 17.8% due to the strengthening of the ringgit against the US dollar.
Cost of sales increased 10.3% as a result of an increase in raw materials purchased, labour costs, and subcontractors’ costs.
As at end March, cash and cash equivalents stood at 78.7 million ringgit.
“The group remains optimistic of our growth prospects despite the recent strengthening of RM against the USD and rising raw material costs,” says Tan Yong Chuan, executive director and chief executive officer of LY Corporation.
“We have successfully negotiated with our customers to increase our future selling price and expects such exchange rate effects to only affect our results in the short term. We have also implemented a hedging policy to respond effectively in managing the rising unfavourable exchange rates,” he adds.
Shares of Ly Corporation last closed at 26 cents on Wednesday.
