Group records RM32.12 million in PAT supported by strong gross profit margin growth
LEON FUAT BERHAD (Leon Fuat or the Group), a manufacturer and trader of steel products, specialising in rolled long and flat products, today announced that the Group registered a 1,110.1% growth in profit after tax (PAT) to RM32.12 million for the quarter ended 30 June 2021 (2Q 2021) compared with the RM2.65 million recorded for the quarter ended 30 June 2020 (2Q 2020).
The strong gain in PAT was due to the 322.5% increase in gross profit (“GP”) to RM53.46 million in 2Q 2021 boosted by higher overall gross profit margin of 17.0 percentage points compared with the RM12.65 million in GP recorded for 2Q 2020.
The Group recorded 73.1% growth in revenue to RM184.78 million for the quarter under review compared with RM106.76 million recorded in 2Q 2020. On a segmental basis, revenue from trading of steel products increased 74.0% to RM73.88 million while revenue from processing of steel products increased by 72.7% to RM110.85 million. The share of revenue from the trading segment stood at approximately 40.0% for 2Q 2021 while the share of revenue from the processing segment stood at approximately 60.0%.
For the six months ended 30 June 2021 (“1H 2021”), PAT increased by 1,735.5% to RM68.23 million compared with the RM3.72 million recorded in the six months ended 30 June 2020 (“1H 2020”). For the period under review, PAT was supported by the 308.8% increase in GP to RM106.80 million compared with RM26.12 million recorded for GP in 1H 2020. The gain in GP for 1H 2021 was boosted by the 74.7% increase in revenue to RM396.26 million compared with the RM226.79 million recorded in revenue for 1H 2020 as well as better overall gross profit margin, which gained 15.5 percentage points to 27.0% in 1H 2021 compared to 11.5% in 1H 2020.
Calvin Ooi Shang How, Executive Director of Leon Fuat said, “We are pleased with the positive result, and we remain optimistic for the rest of the year although there are uncertainties affecting this outlook.”
The surge in steel prices globally since last year is supported by economic recovery and the gradual reopening of economies around the world. The expected rebound will unleash pent-up industrial demand which will hopefully maintain upward momentum for the steel sector.
“For Malaysia, we are seeing a gradual relaxation of containment measures alongside the rapid progress of the domestic vaccination programme would lead to rebound of the economy. We support the government measures to transition society back to normality soon and an emphasis on rejuvenating the economy.”
“We are committed to continue with the positive momentum, building on our strong fundamentals and the continued support from our investors.”
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