KUCHING: Kim Teck Cheong Consolidated Bhd (KTC) reported a growth in revenue of 28 per cent to RM155.73 million for the third quarter of financial year Ended June 30, 2019 (3QFY19).
The company also reported a substantial increase in its profit after tax (PAT) of RM4.07 million, an increase of RM15.44 million, or 136 per cent, in 3QFY19 as compared to the corresponding period in the previous financial year.
Basic earnings per share (EPS) for the reporting quarter based on the profit attributable to ordinary equity owners of the company is recorded at 0.73 sen.
The result of its 3QFY19 was announced after a limited review conducted by its auditor, PKF Malaysia.
The significant rise in revenue is mainly contributed from its Sabah and Sarawak subsidiaries.
“For 3QFY19, contributions from Sabah and Sarawak were recorded at RM82.54 million and RM50.54 million or an increase of 48.26 per cent and 14.37 per cent respectively as compared to the corresponding period in the previous financial year,” said Dexter Lau, KTC’s executive director in a statement.
“The increase in revenue contribution from the operations is mainly due to the engagement of KTC by its new suppliers and retention of existing suppliers with the Company’s infrastructure has helped to improve distribution and selling gaps of new agencies and stability as business partner under the company’s portfolio.
“KTC has more than 7,000 sales and distribution points covering 84 districts in East Malaysia including Brunei.
The group’s core business is supported by a total of 15 distribution centres with warehouse facilities in East Malaysia and Brunei which have contributed in bringing fundamental improvement of the business and deliver higher growth for the Company’s current portfolio of agencies.
“In addition to these, more sales activation plans and promotions conducted by the Company’s sales team had also generated higher sales.”
The Company’s cash flow from operations has improved significantly from a negative cash flow of RM25.26 million as at as at June 30, 2018 to RM16.56 million as at 3QFY19.
This was due to continued improvement in working capital cycle such as inventory turnover from 93 days to 68 days and trade receivables turnover from 83 days to 75 days as compared to 3QFY18.
The company is optimistic of the distribution business segment and expects it will be satisfactory while it continues to be the main contributor in terms of revenue and profits going forward.
“The reform in the tax system with the abolition of Goods and Services Tax (GST) and transition to the Sales and Service Tax (SST) bodes well for the Company as consumer spending is likely to rise, which is expected to elevate the sales,” it added in the statement.
“The Company aims to serve its existing customer better by maintaining high service standards while offering innovative service offerings.
“Furthermore, it also hopes to attract new agencies to add to the Group’s highly diversified agencies portfolio.
“The Company is buoyant of its growth due to the support of its sales and marketing efforts and infrastructure.”
For the reporting quarter, KTC had also reported a decrease in debts and improvement in equity which had resulted in a decline in gearing ratio from 2.34 times to 1.73 times, or 26 per cent, for Year-to-Date Ended 31 March 2019 as compared to FY18.