KUALA LUMPUR (Aug 9): Texchem Resources Bhd saw its net profit jump about 16 times to RM6.73 million in the second quarter ended June 30, 2022 (2QFY22) from RM424,000 a year earlier, thanks to recovery of restaurant division amid the country’s transition to endemicity, as well as the reopening of international borders.
Earnings per share (EPS) increased to 5.70 sen from 0.35 sen the prior year, the Sushi King owner and operator told Bursa Malaysia on Tuesday (Aug 9).
Besides owning and operating the Sushi King chain of restaurants, Texchem’s other main businesses include industrial, food and polymer engineering.
Quarterly revenue in 2QFY22 rose 15.42% to RM301.46 million from RM261.19 million in 2QFY21, as revenue from the restaurant division rose to RM72.9 million from RM40 million.
Exluding the share-based payments of RM400,000, the restaurant division achieved a profit before tax (PBT) of RM3.2 million — a turnaround from a loss before tax (LBT) of RM9.3 million a year ago, as it saw strong rebound in consumer demand and better operational efficiency.
It’s largest revenue-contributing segment, being the industrial segment, was flat at RM143.6 million during the quarter, compared to RM143.5 million a year ago. Texchem said excluding the share-based payments of RM500,000, profit before tax (PBT) for the segment came in at RM4.1 million for 2QFY22, compared with RM3.9 million, mainly due to more favourable sales mix and efficient cost management.
As for its polymer engineering division, it saw a higher quarterly revenue of RM63.4 million in 2QFY22, from RM56.4 million a year ago. PBT (excluding the share-based payment of RM600,000) was also higher at RM4.7 million in 2QFY22, compared with RM4.5 million previously, due to operational efficiency and growth in data storage, data memory and medical life sciences business operations.
Its food division also saw revenue for the quarter rising to RM24.3 million, up 8.4% from RM22.4 million a year ago. Excluding share-based payments of RM200,000, PBT increased to RM2 million during the quarter, double the amount achieved a year ago, on account of more favourable sales mix and efficient cost management.
Meanwhile, its venture business division increased to RM2.6 million from RM2 million, on conducive sheet business. This segment remains loss making.
Texchem also declared a first interim single tier dividend of eight sen per share, with an ex-date of Aug 23, to be paid on Sept 19.
For the first half ended June 30, Texchem’s cumulative net profit soared 181% to RM19.815 million from RM7.06 million, while cumulative revenue grew 15.35% to RM608.95 million, from RM527.93 million.
Compared to the immediate preceding quarter, Texchem’s net profit dropped 48.54% from RM13.08 million in 1QFY22, as revenue declined 1.96% from RM307.49 million due to lower contribution from its food and restaurant divisions. Cumulative EPS rose to 16.78 sen from 5.85 sen.
On prospects, Texchem said it is cautiously optimistic that its outlook for the coming quarters will remain satisfactory, mainly on the recovery of restaurant operations and additional strategic business initiatives to improve the group’s bottomline.
In a separate statement, Texchem executive chairman Tan Sri (Dr) Fumihiko Konishi said the group continues to pursue the implementation and execution of its strategic plans across all core business divisions, which have been charting good progress.
“At the same time, we are also cognizant of the other ongoing challenges like rising interest rates to tame inflationary pressures, geopolitical tensions and emergence of new Covid-19 variants. We shall remain mindful of these challenges and the Group will continue to make efforts to deal with it,” he added.
Texchem shares closed down six sen or 2.03% at RM2.90 apiece on Tuesday, translating into a market capitalisation of RM364.08 million. The counter has risen 148% from when it was trading at RM1.17 apiece on Jan 3.