Highlight Lii Hen's 2Q net profit up 96% on year, declares 7 sen dividend

by **Cals** Mon 24 Aug 2015, 23:22

Highlight
Lii Hen's 2Q net profit up 96% on year, declares 7 sen dividend

KUALA LUMPUR (Aug 24): Lii Hen Industries Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) recorded a 96% net profit rise for its second quarter ended June 30, 2015 (2QFY15) at RM12.66 million, from RM6.45 million a year earlier, as the furniture manufacturer benefited from a weaker ringgit versus the US dollar.
As export-based Lii Hen (fundamental:2.8; valuation:2.4) sells its products in US dollars, a weaker ringgit translates into higher income when the US dollar-denominated sales are converted into the Malaysian currency.
In a filing with Bursa Malaysia today, Lii Hen reported revenue increased to RM138.28 million, from RM97.86 million, due to continuous market demand for the group’s products, especially its bedding items, besides the strengthening US dollar against the ringgit.
"The USD appreciated 13% in the current quarter, as compared to 2014 (2015-3.66, 2014-3.23).
"Due to higher revenue and better USD conversion rate, the Group’s profit before tax for the current quarter recorded at RM17.4 million, increased 100% as compared to the profit before tax of RM8.7 million in the previous corresponding quarter," Lii Hen said.
During 1HFY15, Lii Hen reported higher net profit at RM23.41 million, from RM14.71 million a year earlier. Revenue increased to RM250.36 million, from RM193.2 million.
For the quarter in review, the group declared a dividend of seven sen a share. Lii Hen said its shares would trade ex-dividend this Sept 7, while the payment date falls on Sept 23.
On prospects, Lii Hen said positive market sentiment in US and the strengthening of US dollar against the ringgit would continue to enhance the group’s earnings.
However, the group said it was also mindful of costlier production inputs, due to a weaker ringgit against the US dollar.
"With better controllable cost structure and wider sales market base, the Group is committed to ensure positive result for the year of 2015.
At 2:51pm, Lii Hen shares fell as 10 sen or 2% to RM5.69, its lowest so far today. At RM5.69, the company had a market capitalisation of RM341.4 million.
Lii Hen's shares had gained about 100% this year, outperforming the FBM KLCI's 12% decline.
(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)