Por Teong Eng
KUALA LUMPUR: Mestron Holdings Bhd (Mestron) has maintained a strong momentum during the first half of its financial period ended June 30, 2022 (1HFY22) as the group’s revenue and net profit were more than doubled to RM45.5 million and RM3.4 million respectively.
In a press statement, it said, the surge in revenue was mainly due to the increase in sales demand for standard poles, lanterns and specialty poles, mainly for the telecommunication (telco) sector for the 1HFY22. The group’s revenue was primarily driven by the manufacturing sector, which accounts for 81.1 per cent of the total revenue.
It also noted that its higher net profit was mainly due to the reduction in price of raw materials such as steel plates and steel pipes as well as the higher sales demand for outdoor lighting products.
Mestron’s managing director Por Teong Eng, said: “It has been a great start to the year as we gradually move beyond the Covid-19 pandemic. Despite the challenging operating environment, we are proud to have recorded a strong earnings growth during 1HFY22.
“The management has been actively pursuing opportunities to drive our revenue growth, especially within the telco sector.
“Our capacity and capability to manufacture telco poles and towers put us in a good position to tap into the strong demand in the telco sector amidst the rollout of 5G deployment and the government’s initiatives to bridge the connectivity between developed and underserved areas.”
As seen during 2QFY22, Mestron has managed to maintain its momentum growth as revenue was more than doubled to RM24.1 million while net profit jumped to RM2 million in the 2QFY22 as compared to RM135,000 in 2QFY21.
Despite the strong performance during the 2QFY22 and 1HFY22, Por shared that the higher operating costs for the manufacturing sector will continue to pose challenges for the Group going forward, but the group’s earnings visibility remains intact and supported by an order book of RM50 million as at end-June 2022.
It its Bursa filings, it said, it expected several headwinds to remain because of the continuing Russia-Ukraine conflict as well as the ongoing lockdowns in some of the major cities in China.
“These events have caused further strain on global supply chains, which have led to rising global commodity and raw material prices as well as global logistic disruptions and high shipping costs. In addition, the recent implementation of the new minimum wage standard in Malaysia will result in higher operating costs for the manufacturing sector,” it added.
In order to mitigate these impacts, the group will continue to exercise extra vigilance in the business and will strive to deliver satisfactory performance for the current financial year.
Going forward, Mestron will also explore other opportunities and is looking to diversify the business to expand its sources of revenue and include
other sources of recurring income as a source of its business income.