Dominant Enterprise sees 24% decline in 4Q net profit


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KUALA LUMPUR (May 28): Dominant Enterprise Bhd saw a 24% decline in its net profit to RM9.57 million or 6.96 sen per share for its fourth quarter ended March 31 (FY2015), from RM12.52 million or 8.99 sen per share a year earlier.

The lower net profit was despite a 16% increase in revenue to RM143.63 million, from RM123.74 million in the previous year.

The group proposed a single-tier final dividend payment of one sen per share for FY2015, bringing its total dividend payment per share to five sen for the year.

In its filing with Bursa Malaysia, Dominant Enterprise (fundamental: 1.1; valuation: 3.0) said its manufacturing division had posted lower operating profit of RM1.86 million for the quarter, despite an increase in revenue.

“The increase in revenue was mainly attributed to market share expansion and newly developed products, which enables the group to grow continuously,” it said.

The dampened performance of the manufacturing division was partly offset by higher operating profit from its distribution, as the segment recorded a gain on disposal of its warehouse in Puchong and better topline performance for the quarter.

For the full financial year ended March 31, the company’s net profit fell 3% year-on-year to RM22.43 million, from RM23.13 million, while revenue rose 15% to RM547.61 million from RM477.73 million.

Going forward, the group foresees no downside volatility for wood panel products, due to an expected rise in demand, but added that raw material costs and foreign exchange rates could affect its earnings performance.

“The company will continue to leverage its competitive strengths of its economies of scale to lower its costs of production, in order to achieve satisfactory performance in coming financial year,” said the group.

Dominant Enterprise share price rose three sen or 2% to close at RM1.56, bringing its market capitalisation to RM210.43 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)