Envictus International (BQD) H2 2024 earnings summary

Executive summary

• FY2024 returned to profitability, with net profit of RM50.6m versus a RM32.9m loss in FY2023; revenue rose 21.3% to RM686.8m.

• Results reflected stronger Food Services and Dairies, partially offset by weaker Trading and Frozen Food; a one-time net disposal gain of RM8.0m also contributed.

Financial highlights

• Revenue rose 21.3% to RM686.8m from RM566.1m; gross profit was RM306.2m versus RM220.2m.

• Profit before tax was RM55.2m versus a loss of RM29.3m; net profit was RM50.6m versus a loss of RM32.9m.

• Other operating income increased to RM28.5m from RM5.9m, including RM13.9m gain on asset disposals, RM6.5m foreign-exchange gain and RM1.2m lease-modification gain.

• Finance costs fell 27.4% to RM13.8m from RM19.0m, mainly after repayment of borrowings associated with disposed assets.

• Net cash from operations was RM70.2m; cash and cash equivalents ended at RM36.0m, up from RM15.7m.

Outlook and guidance

• FY2025 plans include 10 additional Texas Chicken outlets, particularly drive-through formats, and closure of two underperforming outlets; improved operating margin is expected with stable poultry prices and supplier savings.

• San Francisco Coffee plans to grow from 53 stores to 69 in FY2025 and launch a premium instant coffee range; pricing, supplier collaboration and resource optimisation target cost pressures.

• Dairies plans a new production line, more hypermarket listings and expansion into East Malaysia; brand promotion and sampling are also planned.

• Trading and Frozen Food growth is expected to benefit from regional travel recovery and income-boosting measures, while e-commerce expansion and pricing and sourcing actions continue.

• Overall outlook is cautiously optimistic amid geopolitical tensions and FX volatility; a stronger ringgit is expected to lower imported raw-material costs.