A-Rank's 4Q net profit jumps 32.8% boosted by overprovision of deferred tax

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KUALA LUMPUR (Sept 28): Aluminum billets manufacturer A-Rank Bhd saw its net profit for the fourth quarter ended July 31, 2015 (4QFY15) climbed 32.8% to RM3.98 million from RM2.99 million a year ago, due to the overprovision of deferred taxation in prior years.

Earnings per share expanded to 3.31 sen from 2.49 sen.

However, A-Rank announced to Bursa Malaysia today that its revenue for the quarter fell 6.4% to RM115.48 million from RM123.35 million in the same corresponding period.

In the filing to Bursa Malaysia, the company explained that the decline in revenue was due to lower business volume although average selling prices were higher as a result of the increase in raw material cost.

A-Rank has proposed a first and final single-tier dividend of 2.25 sen per share, amounting to RM2.7 million, for FY15.

For FY15, A-Rank's net profit rose 8.63% to RM10.32 million, or 8.6 sen per share, against RM9.5 million, or 7.92 sen per share, a year earlier.

Revenue was almost flat at RM485.95 million compared with RM487.3 million in FY14.

A-Rank said the volatility of aluminum prices and weak ringgit has had adverse impacts on its profit margins and the increase in natural gas pricing from July 1 has also added further pressure to margins.

"Nonetheless, the group will remain vigilant and be well-prepared for the volatilities and challenges ahead. As usual, we will continuously focus on improving cost efficiencies and recovery to mitigate any adverse impacts on our business," it added.

Barring unforeseen circumstances, the company said it is "optimistic" about remaining profitable for the forthcoming quarter.

A-Rank closed 0.5 sen or 1.1% higher at 46 sen today, for a market capitalisation of RM55.2 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.)