KUALA LUMPUR (Apr 28): Texchem Resources Bhd’s quarterly net profit ballooned over five times to RM4.99 million, or 4.02 sen, for the first quarter ended March 31 due to higher contributions across most of its business division

Its quarterly revenue rose nearly 15% to RM277.1 million versus RM241.2 million in the previous corresponding quarter.

In a Bursa Malaysia filing this afternoon, Texchem (fundamental: 0.4; valuation: 2) said the industrial division reported a higher pre-tax profit of RM2.1 million in Q12015 against RM1.1 million in Q12014 mainly due to improved results of overseas subsidiaries.

The polymer engineering division managed to reduce the pre-tax loss to RM1.6 million compared to pre-tax loss of RM4 million last year, mainly due to higher sales contribution from wider profit margin products and lower operating expenses.

“The food division recorded a pre-tax profit of RM2.3 million compared to a pre-tax profit of RM1.1 million in Q12014 mainly due to higher sales, improved margins, favourable exchange rates and lower crude oil price.

“For the restaurant division, pre-tax profit increased by RM1.9 million in Q12015 compared to Q12014 mainly due to higher profit of Sushi King outlets and reduction in losses incurred by the new concept restaurants,” said the group in its filing.

On its prospects, Texchem said the business environment for 2015 would remain challenging due to the prevailing global economic condition.

“As the group’s business is diversified, the restaurant division is expected to continue its good performance as domestic consumer demand remains strong. Similarly, the food division is expected to continue operating in a favorable environment as exchange rates, seafood landing and demand continues to be positive influence to the business,” it said.

“Meanwhile, the industrial division and polymer engineering division continue to be influenced by global demand and their performance would be dependent on the expected gradual recovery of the global economy,” it added.

Texchem shares were suspended from trading between 2.30 pm and 3.30 pm today. As at 3.15 pm, it was two sen higher at RM1.51, with a market capitalisation of RM187.39 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.)