Koda (BJZ) H1 2023 earnings summary

Executive summary

• 1H2023 revenue fell 26.4% YoY to US$24.9m; profit attributable to owners fell 90.3% to US$291k.

• Lower orders, weaker gross margin and higher finance costs pressured earnings; operating cash flow remained positive at US$5.9m.

Financial highlights

• Gross profit declined 34.5% to US$6.7m; gross margin fell 3.3 percentage points to 26.7% on higher raw material and direct costs.

• Profit before tax decreased 82.6% to US$629k; profit for the period fell 90.8% to US$269k.

• Other income declined to US$694k, mainly reflecting lower government grants and foreign exchange gains; finance costs rose 69.8% to US$197k.

• Adjusted context: equity-settled share-based payment expense was US$19k in 1H2023 versus US$71k in 1H2022; net foreign exchange loss was US$189k versus a US$272k gain.

Outlook and guidance

• No interim dividend declared; funds retained for business operations.

• Furniture-market inventory replenishment could improve in the near to medium term if inflation eases and rate hikes moderate; China reopening may support activity, though pent-up demand remains uncertain.

• Recovery plans in China are being initiated; previously identified macro pressures and potential cyclical slowdown remain relevant.