Lay Hong attributes losses in 4QFY16 to one-time charge share-based expense
KUALA LUMPUR: Lay Hong Bhd (Lay Hong), a Bursa Malaysia Main Market listed integrated poultry company, attributes the net loss of RM12.57 million in its fourth quarter financial year ended March 31, 2016 (4QFY16), as compared to the net profit of RM4.46 million a year ago, to a one-time charge of a share-based expense of RM15.09 million.
The share- based expense is related to the full grant of 5,250,000 shares under the Share Issuance Scheme (SIS) Option to eligible directors and employees in the current quarter.
Excluding this amount, the company would have a profit before tax (PBT) of RM3.58 million, which is the operational profit and the expense of RM15.09 million will not affect the operational profit of the company.
To recap, on January 12, 2016, the company had granted 5,250,000 shares to eligible directors and employees under the SIS.
Pursuant thereto, a one-time charge of RM15.09 million in fair value of the share option has been charged to the Consolidated Statement of Comprehensive Income as other expenses and credited to the Consolidated Statement of Changes in Equity as SIS Option Reserve in the current quarter, in accordance with the guideline of Malaysian Financial Reporting Standards (MFRS) 2.
For its 4QFY16 revenue, Lay Hong registered RM163.15 million, which is 3.61 per cent lower than the corresponding quarter last year. In a filing to Bursa Malaysia, the company said it was due to lower quantity of poultry products sold and lower average prices.
Lay Hong is of the view that the entry of NH Foods Ltd (NH Foods) into the company as a substantial shareholder in the current quarter has marked a major step forward for the company’s chicken product manufacturing business, particularly in the areas of new product development and market penetration.