HALCYON Agri : 5VJ 0% saw its earnings before interest, taxes, depreciation and amortisation (Ebita) tumble 93.4 per cent to US$1 million in the first quarter ended Mar 31, 2023, from US$15.1 million in the previous corresponding period.

“With raw material prices remaining persistently high, the effect of margin compression is more apparent as we are in a low rubber-tapping season that generally ends mid to end-April,” said the natural rubber supplier in a voluntary business update on Tuesday (May 23) evening.

Revenue for Q1 fell 20.3 per cent to US$492.2 million, from US$617.3 million a year earlier. This came even as sales volumes for the period nudged up 2 per cent to 309,737 tonnes, from 303,574 tonnes in the year-ago period.

Gross profit dropped 35.1 per cent to US$30.5 million, from US$47 million the year before due to the effects of margin compression.

In the regulatory filing, the mainboard-listed company said it would continue to focus on “creating added value to customers as well as managing overall cost amid uncertainty in the market”.

Commenting on the latest results, Li Xuetao, the group’s chief executive, said the group’s immediate priority was to achieve smooth integration with China Hainan Rubber Industry Group as well as keep its cost structure “in check” amid an inflationary environment.

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The mandatory general offer by the Chinese rubber producer for Halcyon Agri closed on Apr 24, with Hainan Rubber gaining 68.1 per cent of the total number of shares.

“We continue to strive (to do) our best in navigating the headwinds and challenges in the near term, but we believe that the long-term demand remains intact,” added Li. “Overall, we remain cautiously optimistic towards the group’s prospects.”