Furniture maker Lii Hen's 3Q net profit jumps 32% due to strong demand, pays 5 sen dividend

KUALA LUMPUR (Nov. 16): Furniture maker Lii Hen Industries Bhd’s net profit for the third quarter ended Sept 30, 2020 (3QFY20) jumped 32.21% to RM28.87 million from RM21.83 million a year ago, as it saw higher demand for most of its products, boosted by a slightly better conversion rate of the US dollar against the ringgit.

Its quarterly revenue rose 42.15% to RM302.06 million from RM212.5 million a year ago, its stock exchange filing showed. Along with the stronger set of results, the group declared a third interim dividend of 5 sen per share, to be paid on Dec 18.

Notwithstanding the stronger results, the group noted that it experienced higher production costs on certain raw materials like board/wood and labour costs in the quarter under review that adversely affected its profit before tax margin, which dropped from 14% in 3QFY19 to 12.4% in 3QFY20.

For the nine months ended Sept 30, the group’s net profit grew 1.63% to RM58.24 million from RM57.3 million a year earlier, while revenue climbed 6.4% to RM648.6 million from RM609.6 million.

"The board of directors is cognizant of this pandemic threat that is yet unabated. With a controllable cost structure in place, a wider market base for the group’s products and rationalization on the use of available workforce, the board is optimistic that the group would be able to ride through the COVID-19 pandemic challenges it currently faces," the group said on its outlook.

"Until a proven vaccine is developed to counter the COVID-19 threat, the Group continues to exercise caution in the way its operating activities are conducted to ensure the requisite requirements issued by the Government for compliance are adhered to in the nation’s quest to combat the viral outbreak," it added.

Lii Hen shares closed 12 sen or 2.67% lower at RM4.38 today, valuing the group at RM788.4 million.