FIHB's net profit quadrupled to RM8.7 mil in Q3 FY22

NST Thu, May 26, 2022 11:22pm - 1 year View Original


KUALA LUMPUR: Federal International Holdings Bhd's (FIHB) net profit jumped by more than four times to RM8.7 million for the third quarter (Q3) ended 30 June 2022 (FY22) compared to RM1.9 million in the same quarter last year.

The positive results were mainly due to recognising a one-off pre-tax gain on factory disposal of RM6.1 million.

FIHB's revenue was up by 4.3 per cent to RM42.6 million in Q3 compared to RM40.8 million in the same quarter of FY21.

The revenue growth was driven mainly by the construction segment.

Executive director Datuk Choy Wai Ceong said that excluding the one-off disposal gain, the company still recorded strong double-digit growth on its bottom line.

"This reflects the resilience of FIHB's business models despite the challenges faced during the pandemic," he said.

FIHB is involved in the manufacturing division, interior-fit-out (IFO) and construction businesses.

Under its manufacturing division, revenue was up by 15 per cent for Q3 to RM3.1 million from RM2.7 million in Q3 FY21.

"The manufacturing division saw an increase in its revenue as the total number of stores shopped, and store sales from Starbucks improved by 27 per cent.

"However, the gross margin for Starbucks was low due to insufficient sales to absorb the fixed factory operating expenses and overheads, as well as additional expenses incurred due to factory relocation and the cost of repairs to machinery due to the flash flood," Choy said.

Meanwhile, the IFO division recorded a turnover of RM5.9 million from inter-segment sales in the Q3 FY22, while its construction business segment's revenue improved by three per cent to RM39.4 million during the quarter.

"Going forward, we think that the construction business segment will continue to play an important role in providing earnings visibility for the company," Choy said.

Currently, the division has three ongoing projects with a combined contract sum of RM302 million.

Meanwhile, the pandemic affected the company's manufacturing segment and IFO division.

According to Choy, the manufacturing division of FIHB has seen a significant reduction in export orders due to the slowdown in Starbucks retail store expansion in the Asia Pacific region due to the Covid-19 pandemic.

The prospect for the division hinges on the extent of the Covid-19 pandemic's impact on its key customer's store expansion programme and the ability to secure other sales.

"Going forward, we are excited about the transition towards the endemic phase and the reopening of the economy," Choy said.

The company is actively exploring new business opportunities to contribute positively to FIHB's continued growth.

This comprises collaborations with SPIC Energy Malaysia Bhd and Fabulous Sunview Sdn Bhd, entered into by Warrants RE Assets Sdn Bhd (WREA), its joint-controlled subsidiary, with its growth into the renewable energy business segment.

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