Halcyon Agri swings to profit in H1 amid higher rubber prices

NATURAL rubber supplier Halcyon Agri Corp posted a net profit of US$759,000 for the first half of this year, reversing from the net loss of US$40.4 million in the year-ago period.

Revenue increased by 49.6 per cent year on year to US$1.15 billion for the six months ended June 30, from US$770.2 million previously.

This came as sales volume rebounded, and even exceeded pre-pandemic levels in H1 2019 by 7.4 per cent, while unit margins also improved, Halcyon Agri said in a bourse filing on Thursday evening.

Natural rubber prices had surged almost 30 per cent since the start of 2021 to a four-year high at the end of February.

The price increase was underpinned by robust post-lockdown demand and a supply shortage due to the reduction of economic activities in major rubber-producing countries to curb the recent surge in Covid-19 cases, Halcyon Agri group chief executive Li Xuetao said.

The group's two key business segments are Halcyon Rubber Company, which supplies natural rubber to tyre makers, and Corrie MacColl International, which provides specialist polymers for industrial and non-tyre applications.

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Despite the net profit during the first half, adjusted loss attributable to owners of the company still amounted to about US$3 million, after deducting some US$3.8 million in dividend reserved for distribution to perpetual securities holders.

Loss per share thus stood at 0.19 US cent for H1 2021, narrowing from the loss per share of 2.53 US cents a year ago.

No dividend was recommended for the first half of this year, given the insignificant profit for the period.

Shares in Halcyon Agri were flat at 26.5 Singapore cents at Thursday's close, before it announced its results.