Further delay in Malaysia’s feed price-fixing case

Leong Hup International has been granted another extension for its response to allegations of price fixing.

Animal Feed For Chicken And Pig Closeup With White Background. P
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In an ongoing investigation into alleged collusion over poultry feed prices in Malaysia, one of the parties has been granted a further two-month extension to provide written evidence in its defense.

One of the feed companies involved in allegations of price fixing has been granted another extension for its response.

Leong Hup International Bhd — on behalf of its wholly owned subsidiary Leong Hup Feedmill Malaysia Sdn Bhd — now has until December 19 to provide records requested by the Malaysian Competition Commission (MyCC), reports TheEdgeMarkets.

Along with four other poultry feed companies, the MyCC found in August that Leong Hup may have infringed the Competition Act 2010. At the time, it was alleged that the five companies may have colluded to raise the price of poultry feeds in Malaysia between early 2020 and the middle of this year.

Subsequently, MyCC granted Leong Hup an extension for its written submission, which expired this month.

According to TheEdgeMarkets, Leong Hup shares closed up 1.11% higher on October 14 — the date of the latest MyCC announcement. This puts the group’s market capitalization of MYR1.64 billion (US$347 million).

Reasons for MyCC’s decision to push back the deadline for this one company’s submission is not reported.

Leong Hup reports improved results for second quarter

Around one month ago, Malaysia-based chicken, egg and feed group Leong Hup International released its results for the second quarter of the fiscal year ended June 30.

For this three-month period, revenue was MYR2.272 billion — up from MYR1.854 billion for the corresponding quarter in 2021. However, operating expenses also increased — from MYR1.804 billion to MYR2.245 billion. Despite the higher costs, net profit was 19% higher year-on-year at MYR33.4 million.

In contrast, the group’s net profit for the latest half-year at MYR57.3 million was just 52% of the same period of 2021. At MYR4.359 billion, revenue was up 23% above the figure for 2021. However, operating expenses rose by 27% to MYR4.282 billion.

Group CEO Tan Sri Lau Tuang Nguang attributed the company’s improving situation for the latest quarter mainly to the lifting of restrictions related to the coronavirus (COVID-19) pandemic across its operating markets in Southeast Asia.

In terms of revenue, the group’s livestock and poultry business expanded by 28%. This was mainly driven by higher average selling prices in its home market of Malaysia, as well as in Vietnam, Indonesia and the Philippines. In Indonesia, Malaysia and the Philippines, higher volumes and prices helped push up revenue from feed manufacturing by 16%.

For the latest quarter, the group’s operation in Indonesia achieved the highest revenue, accounting for 36.3% of the total. Next came Malaysia (25.6%), Vietnam (24.8%), Singapore (9.1%), and the Philippines (4.2%).

More on Leong Hup International

According to the group’s website, total revenue in the year to December 31, 2021, amounted to MYR7.15 billion. Profitability (as earnings before interest, tax, depreciation and amortization, EBITDA) was MYR531 million, leaving profit after tax and minority interests of MYR85 million.

Over the same period, Leong Hup International sold 503.8 million day-old-chicks, 142.3 million broiler chickens, and 1.841 billion table eggs. Feed sales for the year amounted to 2.563 million metric tons (mmt) of the group’s production capacity of 3.976 mmt.

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