KUALA LUMPUR (November 27): WTK Holdings Bhd posted net profit of RM9.7 million for its third quarter ended Sept 30, 2014, falling 30% from RM13.9 million the previous year, due to slower sales and lower selling prices.

Revenue for the quarter was slightly lower at RM155.6 million, down 2% from RM159.2 million in the year before.

Earnings per share came in at 2.24 sen for the quarter compared to 3.21 sen a year ago.

In a filing with Bursa Malaysia, the Sarawak-based group said its timber division registered flat profit before tax (PBT) of RM11.7 million for the quarter, due to lower sales volume and a slight decrease in selling price of plywood during the quarter.

“The drop in plywood sales volume was mainly due to the slower demand and higher stock holding situation in Japan as the impact of increased consumption tax in April 2014,” it said.

Meanwhile, its manufacturing and trading division posted a 52% decline in PBT to RM3.1 million due to lower revenue and higher costs.

For the nine-month period up to Sept 30, net profit rose 4% year-on-year (y-o-y) to RM36.5 million from RM35.0 million while revenue contracted 2% to RM506.1 million from RM517.0 million.

EPS rose to 8.42 sen from 8.07 sen a year ago.  

Going forward, the group expects a challenging business environment for its timber business, as its operations in Japan – which accounts for 80% of its exports – will continue to be affected by dampened consumer spending and industry production due to the rise in consumption tax.

“In view of the challenging environment, the Group is cautious of the present economic sentiment and shall endeavor to ensure effective cost management and product quality enhancement in order to stay resilient and to enhance market presence,” said WTK.

Meanwhile, the group will continue to improve its non-timber division by developing new products, while also improving the quality of its products, it said.

WTK rose 2 sen or 1.65%, closing at RM1.23. Its market capitalisation stood at RM534.04 million.