KUCHING: Sabah-based Kim Teck Cheong Consolidated Bhd’s (KTC) earnings returned to the black with a net profit of RM1.04 million for the fourth quarter of financial year 2016 (4QFY16) ended June 2016 from a net loss of RM1.67 million in the previous quarter ended March 2016 (3QFY16).
The consumer-packaged goods (CPG) distributor in its accounts notes filed to the stock exchange on Aug 30 said the improved quarterly earnings was attributed to higher revenue generated and lower expenses as a result of lesser inventories write-off.
KTC turned around a loss before taxation of RM2.05 million for the quarter ended March 31, 2016 to a profit before taxation of RM1.82 million for the quarter ended June 30, 2016.
KTC explained that the enhanced financial results were attributed to the group’s revenue which increased by 22.17 per cent from RM80.23 million in 3QFY16 to RM98.02 million in 4QFY16.
The company also said the group continuously enhancing its inventory control to minimise the need to write-off expired products which had occurred in 3QFY16.
For the full financial year 2016 (FY16) ended June 2016, KTC said it registered a revenue of RM341.16 million and a net profit of RM1.904 million.
Additionally, the group’s main revenue stream was derived from the distribution of third party brands of CPG, which represented RM94.40 million (96.31 per cent) and RM326.26 million (95.63 per cent) of the total group’s revenue for the quarter ended 30 June 30, 2016 and 12 months financial period ended June 30, 2016.
It added contribution of revenue for the group was also derived from the distribution of its own brands of CPG, which accounted for RM2.05 million (2.09 per cent) and RM8.32 million (2.44 per cent) of the total group’s revenue for 4QFY16 and FY16 respectively.
KTC observed that a small proportion of the group’s business was the manufacturing of bakery products, which accounted for RM1.57 million (1.60 per cent) and RM6.58 million (1.93 per cent) of the total group’s revenue for the quarter ended June 30 2016 and 12 months financial period ended June 30, 2016 respectively.
Going forward, KTC said the group sees opportunities in the fast moving consumer goods markets and has embarked on a series of business activities for the upcoming financial year ending June 30, 2017.
As disclosed in the prospectus of the company dated October 28, 2015 prior to its listing on the ACE Market, the group has in place a series of future business plans that are focused in expanding its distribution and manufacturing operations in several areas.
These include establishing a new distribution centre in Brunei, acquisition of warehousing facilities in Sarawak and construction of new warehousing facility in Kota Kinabalu, Sabah.
Apart from that, its business plans also include the expansion of own brands of CPG, venturing into new markets for manufactured bakery products, expansion of manufacturing facility and new bakery products in Sabah and setting-up a new manufacturing facility for bakery products in Sarawak.
The group continues to be in the expansion mode with the appointment as distributor for products from Lee Soon Seng Plastics Sdn Bhd for Sabah and Sarawak markets, Anakku Sdn Bhd for Sabah and Sarawak markets, Cotra Enterprises Sdn Bhd for Sabah and Sarawak markets and Proctor & Gamble (Malaysia) Sdn Bhd for Sarawak and Brunei markets although the market environment becomes more challenging on the back of slowdown in the global economy coupled with volatility in the equity market.