25/08/2012 (The Star) - QL Resources Bhd is maintaining its target of achieving double-digit growth in its current year ending March 31 (FY13) despite earlier market concerns it may not be able to achieve such growth in the face of rising raw material prices and immature oil palm trees.

“Looking at the first-quarter results, it seems we are on track. We will strive for 10% to 15% growth in revenue and earnings in FY13,” group managing director Chia Song Kun told reporters after the company's AGM.

He pointed out that FY13 would be the first year of contribution from the company's investments in Indonesia and Vietnam.

“They should contribute 10% of our top and bottom line. These will mainly be from Indonesia,” Chia said.

He also said the group's capital expenditure in FY13 would be maintained at RM200mil, divided equally for domestic and regional expansion.

QL Resources' core divisions are marine products manufacturing, integrated livestock farming and palm oil.

It is the largest fishmeal maker in Malaysia and the top producer of surimi (processed fish paste) in Asia. The group is also among the country's leading operators in animal feed raw materials and poultry farming, with a production rate of about three million eggs a day (estimated to be 15% of the egg market in Malaysia).

For its first quarter ended June 30, QL Resources posted a 13.07% increase in net profit to RM31.4mil, from RM27.8mil a year earlier, boosted by contribution from the marine product manufacturing (MPM) division.

It also said the performance of its poultry egg business in Peninsular Malaysia would be affected by poor egg prices and rising raw material costs.

However, Chia expects the current depressed prices of eggs would begin to improve in October.

“For the past one to two years, there has been over-production of chicken eggs in Peninsular Malaysia due to the good times.

“But animal feed raw materials have gone up in price due to the drought in the United States, which has caused prices of feed raw materials like corn and soybean meal to increase by 30% to 40%. These escalating costs will push poultry farmers to sell their older hens faster. Once production is reduced, egg prices will start to increase,” he said.