Koda (BJZ) H2 2023 earnings summary

Executive summary

• FY2023 revenue fell 44.8% YoY to US$43.8m as customers slowed order replenishment; net loss attributable to owners was US$2.8m, versus US$5.7m profit in FY2022.

• Despite the loss, operating cash flow was US$7.7m and year-end cash and cash equivalents rose to US$15.3m.

• This was the first annual net loss since FY2016; accumulated net profit over FY2016–FY2022 was US$35.5m.

Financial highlights

• Revenue was US$43.8m, down US$35.6m YoY; gross profit fell to US$12.0m from US$24.6m as lower sales and higher direct unit costs reduced margins.

• Loss before tax was US$2.0m versus FY2022 profit before tax of US$6.9m; net loss was US$2.9m versus net profit of US$5.5m.

• Other income declined to US$2.5m from US$3.3m, including lower fire-insurance compensation and no FX gain; other expenses fell to US$0.7m, excluding FY2022’s one-off Vietnam fire loss but including FY2023 FX losses.

• Administrative expenses decreased 16.6% to US$8.7m, mainly on lower staff costs and performance bonuses; finance costs increased 47.0% to US$0.4m on higher loan rates.

Outlook and guidance

• Recovery depends on export clients’ inventory replenishment and easing global inflation; inflation remained elevated and recession risk and weak consumer confidence clouded demand.

• Plans include monitoring customer order recovery, selectively pursuing trade fairs, diversifying markets, continuing design investment and building operating cash flow to support growth.

• Commune expanded logistics networks and inventory positions in northwestern Europe and India, with encouraging feedback on its designs at Maison & Objet in Paris.