For FY22, Focus Lumber reported an operating profit of RM34.62 million, which was 99 per cent higher than the RM17.41 million reported a year earlier, due to the notable improvement from the uptrending of average selling price and strengthening of US dollar throughout the financial year.
KUCHING (April 24): Sabah-based manufacturer of wood products Focus Lumber Bhd (Focus Lumber) recorded a revenue of RM134.82 million, improving slightly by one per cent for the financial year 2022.
This was mainly driven by the strong demand on plywood amidst low inventories caused primarily by the disruption to global supply chain resulting in significant surge in lumber prices since the fourth quarter of year 2021.
In the group’s Annual Report 2022 released recently, it reported an operating profit of RM34.62 million, which was 99 per cent higher than the RM17.41 million reported a year earlier, due to the notable improvement from the uptrending of average selling price and strengthening of US dollar throughout the financial year.
“Non-operating income of RM1.64 million, which was mainly gains from placement in money market funds, improved by 73 per cent as compared to previous financial year as a result of rates hike by the Bank Negara during the financial year,” it said in the report.
“For the financial year 2022, the group reported profit after tax of RM27.67 million, an increase of 80 per cent from RM15.40 million recorded in 2021.”
Focus Lumber’s plywood can be used in many different applications where high-quality and highstrength sheet materials are required. The group produces mainly thin panel plywood of which the thickness is below 6mm and they are capable of further processing by laminate factories.
These factories prefer thin panel plywood which is also a preferred choice for the recreational vehicle (RV) market in the United States (US), where most of Focus Lumber’s plywood is exported to.
Looking forward, RV shipments are expected to fall through the first half of 2023 as consumers are squeezed by inflation, higher interest rates, and a slowing economy.
This will affect the demand of its thin plywood for the US market, it said.
“However, the pace of that decline is expected to ease and begin to recover in the latter part of the year,” the group said. “Due to this, we expect that the operating environment to be challenging before the recovery of US economy, particularly in the housing and RV industry.
“In the short-term, we shift our focus to other markets in order to secure more orders while the US economy recovers. We have recently continued our supply to our customers at Thailand, UK and Australia.
“We expect our supply to UK to improve in year 2023 after the shipping and logistic constraint eased. We also target to further penetrate into European market going forward in order to reduce our significant reliance on US market.”
Near-term challenges, including relatively high and rising interest rates, and inflationary pressures, are expected to cause a temporary slowing of demand for Focus Lumber’s products.
However, the group was confident that it will be able to navigate through these periods and respond to opportunities for long-term growth ahead.