Friday 29 Mar 2024
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KUALA LUMPUR (July 15): Zhulian Corp Bhd’s quarterly net profit contracted 42% for the second quarter ended May 31, 2020 (2QFY20) to RM11.39 million or 2.47 sen per share, from RM19.53 million or 4.24 sen per share a year earlier dragged by lower sales.

Its quarterly revenue slipped 25% to RM39.5 million, from RM52.32 million, the group reported in a filing with Bursa Malaysia today.

Notably, its operating profit for the quarter stood at RM10.36 million, down 41% from RM17.44 million in the previous corresponding quarter.

Despite the lower quarterly earnings, the group still declared a second interim dividend of three sen per share totalling RM13.8 million in respect of the financial year ending Nov 30, 2020 (FY20). The dividend is  payable on Sept 9. In comparison, the group paid a two sen dividend in 2QFY19.

For the cumulative six months period of FY20, net profit shrank 27% to RM22.23 million from RM30.32 million last year, while revenue was down 8% to RM84.34 million from RM91.78 million.

The group attributed the decrease in earnings to the impairment of investment cost in a property development project which the management of the equity accounted investee had decided to defer due to unfavourable market conditions and forecasts.

“Notwithstanding our share of this impairment loss, the direct marketing operation of the equity accounted investee had generated higher profit than last year's corresponding period,” Zhulian added.

Zhulian also noted that the lower revenue was due to the COVID-19 movement restriction order imposed by the government authority which mandated the group to stop all production, affecting its ability to fulfil sales orders.

The company noted that its business is closely linked to consumer sentiments and the fluctuating foreign currency exchange.

In light of the COVID-19 pandemic, Zhulian said it ensures its business' long-term survival by actively adapting to the constant market demand change, while remaining cautious to potential reverberations from the economic impact already caused by COVID-19 pandemic.

“The group is committed to continuously improve its business operational efficiency and maintain sufficient cash flow in the year 2020,” Zhulian said.

Shares of Zhulian closed two sen or 1.57% higher at RM1.29, valuing it at RM593.4 million. The counter has fallen 12.2% year to date from RM1.47.

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