Thursday 28 Mar 2024
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KUALA LUMPUR: DKSH Holdings (Malaysia) Bhd registered a 14% year-on-year decline in its net profit for the second quarter ended June 30, 2018 (2QFY18), as rising operating expenditure offset growth in the group's quarterly revenue.

It recorded a net profit of RM14.05 million compared with RM16.36 million previously, while revenue grew 3.5% to RM1.44 billion from RM1.39 billion, thanks to organic growth in existing clients. Operating expenditure during the period, however, rose 3.7% to 1.42 billion from RM1.37 billion.

The group also recorded a marginally y-o-y higher finance cost of RM1.84 million versus RM1.32 million previously, while other operating income fell to RM175,000 from RM942,000, its stock exchange filing showed.

For the first half of the year (1HFY18), DKSH Malaysia's net profit dipped 5.8% to RM24.86 million from RM26.4 million in 1HFY17, despite revenue growing 4.9% to RM2.9 billion from RM2.76 billion, which it said was again due to the underlying organic growth in existing clients, primarily in its logistics segment.

DKSH also noted its operating costs was up 5% y-o-y from RM2.73 billion to RM2.87 billion, which it said was slightly higher than the growth in revenue due to a change in product mix which led to a corresponding small increase in cost of goods sold and a slight increase in cost base to support future growth.

The group has an overall neutral outlook for the rest of 2018.

While it remains positive on its logistics segment, it said prospects for its marketing and distribution segment are less positive due to short-term volatility relating to the introduction of Sales and Services Tax (SST) and a one-off negative impact from a specific client contract.

Regardless, DKSH said there are two market trends that will support its positive medium-to-long term outlook for the group, namely the country's growing middle class that supports demand for consumer goods and healthcare products, and manufacturers' increasing focus on core competencies which lead them to seek specialised service providers to grow with.

DKSH's shares closed up 7 sen or 1.83% to RM3.90 today, for a market capitalisation of RM614.87 million.

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