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KUALA LUMPUR (Aug 29): Pecca Group Bhd posted a net profit of RM8.25 million — its best to date — for the fourth quarter ended June 30, 2022 (4QFY22), compared with a net profit of RM28,000 in the same period a year ago, on higher sales volume achieved in its automotive segment.

This compared to a shortened operating period in the same period in the preceding year, due to full movement control order enforced by the government in June 2021, which saw the group experiencing a total lockdown of its automotive operations.

Quarterly revenue surged 71.22% to RM50.75 million — its highest to date — from RM29.64 million, driven by leather upholstery, leather cut pieces supply and healthcare division which contributed approximately 83%, 7% and 10% of the total revenue respectively. 

“OEM leather car seat segment contributed approximately 83% of the total revenue for leather car seat covers, while replacement equipment manufacturer (REM) and pre-delivery inspection (PDI) contributed approximately 7% and 10% respectively,” Pecca noted in a bourse filing on Monday (Aug 29). 

On a quarterly basis, Pecca’s net profit improved from RM8.09 million posted in 3QFY22, as revenue climbed 11.16% from RM45.65 million.

For the full year (FY22), Pecca also registered a fresh high in net profit of RM22.85 million, an increase of 18.81% from RM19.23 million posted 12 months ago, as cumulative revenue rose 13.57% to a new high of RM164.39 million from RM144.75 million.

Looking ahead, Pecca remains confident that the trend of demand will continue to grow for the new financial year FY23, as the group’s margins would benefit from improving labour market conditions that ease labour shortages and the continued implementation of multi-year investment projects by the government.

As such, the group will continue to focus on cost efficiency through continuous process improvement, automation and prudent procurement strategies. 

“Despite the new minimum wage of RM1,500 per month having taken effect from May 1 this year, it remains at manageable levels. The group has been working with various stakeholders to share the burden of rising operations costs,” it said.

Under the automotive segment, Pecca expects to expand its foreign customer base in the REM segment and penetrate new markets in the US, Australia, New Zealand, Singapore and Europe, following the reopening of the economy globally.

As for the aviation segment, the next milestone is to obtain certification from the European Aviation Safety Agency (EASA) by 1H23, to allow Pecca to service and supply leather seat covers to European registered aircraft as well.

“This is a more stringent and regulated segment with a fast turnaround time for delivery; we are confident that this segment will further expand the margin of the group,” it added.

Meanwhile, Pecca does not foresee severe impact on its face masks business, on expectations that demand for personal protective equipment (PPE) products such as medical-grade masks and other mask varieties will continue to be a necessary part of daily life for much of the foreseeable future.

Pecca’s share price settled two sen or 2.38% higher at 86 sen on Monday, bringing the group a market capitalisation of RM646.7 million.

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