Karex's 2Q profit halves on less favourable sales mix

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KUALA LUMPUR (Feb 25): Karex Bhd, the world's largest condom maker, saw its net profit halve in its second quarter ended Dec 31, 2018 (2QFY19), due to a less favourable sales mix.

Net profit for 2QFY19 fell to RM1.4 million from RM3.17 million a year ago, as the 2.7% rise in revenue — to RM113.55 million from RM110.52 million on higher sales from its sexual wellness segment due to more tender orders being shipped out — was more than offset by a stronger rise in cost of goods sold, its quarterly results announcement today showed.

Cost of goods sold came in at RM89.22 million, up 10.1% from RM81.01 million previously.

"Sales contributed by sexual wellness segment grew by 1.7% to RM104.5 million mainly due to more tender orders being shipped out in 2QFY2019. In comparison to the corresponding period a year ago, results from operations were lowered by a less favourable sales mix leading to a lower profit before tax, profit after tax and profit attributable to owners of the company," the group said.

For the first half of FY19 (1HFY19), the group's net profit fell 54.3% to RM3.37 million from RM7.38 million in 1HFY18, while revenue retreated 5.7% to RM205.71 million from RM218.11 million.

"For the six-month period under review (6MFY2019), revenue lowered by 5.7% to RM205.7 million due to lower contribution from sexual wellness [segment]. Results from operations for the 6MFY2019 were held back by a less favourable sales mix. Profit after tax and profit attributable to owners of the company have correspondingly decreased," it said.

Karex shares slipped 2 sen or 4.44% to close at 43 sen today, giving it a market capitalisation of RM431.02 million.