Kim Teck Cheong posts Q2 earnings of RM2.63mil

KUALA LUMPUR: Consumer packaged goods distributor Kim Teck Cheong Consolidated Bhd (KTC) posted a net profit of RM2.63mil for the second quarter of the financial year ending June 30, 2019 (FY19), as compared to RM78,000 in the same quarter of FY18.

This was mainly attributed to a surge in demand for fast moving inventories and better profit margins.

Revenue for the quarter grew 60% year-on-year to RM150.3mil, mainly due to the group’s Sabah, Sarawak, Labuan and Brunei subsidiaries, which saw higher sales of fast moving inventories and surge of demand for consumer packaged products distributed during the festive season.

KTC’s first half FY19 net profit stood at RM4.79mil, on the back of a revenue of RM304.09mil.

Going forward, the group is optimistic of the distribution business segment and expects it to continue to be the major contributor in terms of revenue and profits to KTC.

The abolishment of the Goods and Services Tax (GST) and the reintroduction of the Sales and Service Tax (SST) bodes well for KTC as consumer spending is likely to rise, which will in turn increase sales.

The group is striving to serve its existing customers better by maintaining a high service standards while offering innovative service offerings, while attracting new agencies to complement KTC’s highly diversified agencies portfolio.

KTC executive director Dexter Lau said in a press release, “The significant improvements in various aspects of the company is a sign that we are on the right track, constantly improving and adapting wherever necessary.

“The investments we have made are bearing fruit and we expect the trend currently seen to carry on for the long term.

“There is always room for improvement, be it in making our operations more efficient or cutting unnecessary costs.

“We will seek them out as we set our sights on the future.”

KTC had also reported a decrease in debts and improvement in equity which resulted in a 24% decrease of its gearing ratio from 2.34 times to 1.78 times.

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