Reading $CAB / 7174 (CAB CAKARAN CORPORATION BERHAD) 2QFY2024 QR (Period ending Mar'23) and some quick updates:

For this recent quarter, we’ll have to take into consideration that there are no more government subsidies on chicken. In the previous year’s corresponding quarter, they received RM11.75 mil of government subsidies.

With that in mind, let’s see their recent quarter performance:

- Overall recorded total revenue at RM574mil - minor increase of 0.69% vs LY mainly due to higher sales achieved by the supermarket division.
- Net profit stands at RM20 mil as compared to RM36mil vs LY same quarter, which is a 55% decrease (business seems quite badly hit without the government subsidies actually).
- There’s a 15% increase in their administrative expenses & marketing and selling expenses this quarter vs LY, considerably substantial.
- Revenue breakdown based on geography for the quarter:
Malaysia – 84.09%
SG – 15.59%
Others - 0.32%
- JV into Indonesia market still pending the other party to resolve the implementation framework.

1. Integrated poultry division
- Looking at 2QFY2024 vs 2QFY2023, revenue decreased slightly from RM542.05 million to RM541.95 million and profit from operations dropped by 38.79% from RM59.7mil to RM36.5mil. This was mostly due to a decrease in the average selling price for chicks and broilers. The selling price of chicks and broilers dropped by 13.65% and 2.61% respectively, and even if we subtract out the subsidy given (RM11.75 mil), then it would be a drop of approx. RM11.4mil.
- If comparing vs last immediate quarter, the production of chicks and broilers increased by 4% and 7% respectively and there is an increase of selling price of chicks and broilers by 7.5% and 2.9% respectively. However, the increase in the gross profit was offset by their administrative expenses & marketing and selling expenses as stated earlier.

2. Supermarket division
- Recorded a higher revenue of RM37.65 million, still mainly driven by sales generated by two newly opened outlets in the previous FY.
- It is however still loss-making from operations dragged down by lower margin as well as higher marketing and selling expenses.

3. Fast-food division
- Still recording a loss after operations of RM0.12mil despite having a higher revenue of RM1.1mil.

General prospects and environment:
- Feed cost is expected to remain stable
- Demand for chicken is stable
- However there is some downward pressure on the selling price due to oversupply of frozen chicken from other countries being dumped into Malaysia.


Read my write-up on 1QFY2024 QR here: https://cutt.ly/VeoM2Dl3