Friday 29 Mar 2024
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GEORGE TOWN (Sept 30): The weak ringgit factor is a boost to Penang-based filing and stationeries items manufacturer Asia File Corp Bhd.

Asia File executive chairman Datuk Michael Lim Soon Huat said that currently 90% of its revenue is denominated in currencies other than the ringgit, such as the US dollar, Euro and British Pound.

“We derive 90% of our revenue in currencies other than the ringgit; and with the current weak ringgit situation, it serves as a natural hedge for us, in the sense that our exports can cover 80% of imports which are in US dollars,” he told reporters after the company’s annual general meeting today.

The weak ringgit helped to boost the group’s earnings for the first quarter ended June 30, 2015 (1QFY16), where it reported a 32.6% increase in net profit to RM19.85 million, from RM14.97 million in 1QFY15.

However, revenue had dropped by 9.9% to RM93.97 million from RM104.32 million a year ago.

“Last year our revenue was higher as our customers, which are mainly in the European market, were building up their stock buffers, and that sales pattern had normalised in 1QFY16, hence the lower sales numbers,” said Lim.

He added that the group currently has cash reserves close to RM150 million.

“Down the road, we are looking for companies in which we can integrate our business into, mainly downstream players in the European market,” said Lim.

(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.)

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