KUALA LUMPUR: Seng Fong Holdings Bhd is cautiously optimistic about its prospects for the financial year ending June 30, 2027 (FY27), while continuing to focus on manufacturing efficiency, supply chain diversification and cost optimisation amid uncertainties surrounding natural rubber prices, raw material costs, customer demand and foreign exchange movements.
The natural rubber processor said it was progressing with the installation of smart rubber manufacturing equipment at Factory 3 and a battery energy storage system, with both projects expected to be completed by end-2026.
The initiatives are aimed at enhancing automation, stabilising electricity consumption and improving energy cost management.
Seng Fong is also advancing plans to establish rubber processing operations in Ghana following its acquisition of a 51% stake in Rainbow Rubber Buying Center Ltd in September 2026.
The group said the investment would provide direct access to raw materials at source, improve supply chain traceability and diversify its raw material supply. It intends to inject approximately US$2.04mil (RM8.32mil) into the Ghanaian subsidiary, funded through internally generated funds, to develop its rubber processing facility.
On its financial performance, Seng Fong recorded a net profit of RM12.38mil in the first quarter ended Sept 30, 2026 (1QFY27), reversing a net loss of RM5.06mil in the corresponding quarter a year earlier.
Revenue increased 41.1% year-on-year (y-o-y) to RM330.26mil from RM234.05mil, while the group swung to a gross profit of RM22.25mil from a gross loss of RM1.33mil.
Profit before tax (PBT) stood at RM15.79mil, compared with a loss before tax of RM6.21mil previously.
The improved performance was driven by a 14.5% increase in sales volume to 36,429 metric tonnes (MT), from 31,792 MT, alongside a 23.1% rise in average selling price to RM9,066 per MT from RM7,362 per MT.
The group also attributed the improvement in gross profitability to a greater contribution from higher-margin premium-grade products, better production efficiency from automation and savings from its in-house logistics operations.
On a quarter-on-quarter (q-o-q) basis, revenue rose 44.3% from RM228.84mil in the preceding fourth quarter ended June 30, 2026 (4QFY26).
Gross profit increased 27.2% from RM17.5mil, while PBT grew 5.8% from RM14.92mil.
The higher quarterly revenue reflected a 27.6% increase in sales volume from 28,548 MT, coupled with a 13.1% improvement in average selling price from RM8,016 per MT.
However, PBT margin narrowed to 4.8% from 6.5% in the preceding quarter, partly because 4QFY26 included a RM2.4mil fair value gain on derivatives.
For the cumulative period, 1QFY27 also represented the group's first quarter of FY27, with revenue of RM330.26mil and net profit of RM12.38mil, against RM234.05mil in revenue and a net loss of RM5.06mil in the corresponding period of FY26.
Earnings per share stood at 1.72 sen, compared with a loss per share of 0.70 sen previously.
On dividends, the board declared a first interim single-tier dividend of one sen per share for FY27, amounting to approximately RM7.22mil.
The dividend will be payable on Dec 24, 2026, to shareholders registered as at Dec 4, 2026.
Seng Fong is also advancing plans to establish rubber processing operations in Ghana following its acquisition of a 51% stake in Rainbow Rubber Buying Center Ltd in September 2026.
The group said the investment would provide direct access to raw materials at source, improve supply chain traceability and diversify its raw material supply. It intends to inject approximately US$2.04mil (RM8.32mil) into the Ghanaian subsidiary, funded through internally generated funds, to develop its rubber processing facility.