KUALA LUMPUR (Aug 10): A continuous escalation in input costs has slowed Hup Seng Industries Bhd's margin growth, leading the group to report a lower net profit of RM3.04 million for the second quarter ended June 30, 2022 (2QFY22).

This was a 15.14% decline from the RM3.58 million reported for 2QFY21, according to the biscuit maker's filing with Bursa Malaysia on Wednesday (Aug 10).

Earnings per share (EPS) fell to 0.38 sen from 0.45 sen a year earlier.

Quarterly revenue, meanwhile, rose 11% to RM73.81 million in 2QFY22 from RM66.5 million in 2QFY21, mainly due to higher selling prices.

"Export market grew 6% or RM900,000 compared to the previous corresponding period, mainly from Maldives and Thailand. Domestic market increased by about 13% or RM6.4 million from all channels," said the group.

For the cumulative six months ended June 30, 2022, Hup Seng's net profit decreased 27.06% to RM9.81 million from RM13.45 million a year ago, while revenue increased 2.56% to RM153.07 million from RM149.24 million. EPS went down to 1.23 sen from 1.68 sen.

Going forward, Hup Seng said its operating environment is expected to remain highly competitive this year.

It added that a sharp increase in global commodity prices and the government's gradual withdrawal of food and fuel subsidies, which have put pressure on the group's input costs, remain a concern.

Nonetheless, the group said it will closely monitor the development of commodity prices, evaluate and adjust its pricing strategies and/or resize major products when the need arises.

It also added that it will leverage operational efficiencies and cost-saving initiatives.

Hup Seng shares closed unchanged at 75 sen on Wednesday, with a market capitalisation of RM596.05 million.