Swang Chai Chuan (2321) H1 2024 earnings summary

Executive summary

• H1 revenue was RM471.757m, down 2.1% YoY, while profit for the period fell to RM14.283m from RM16.450m as competitive pricing and inflation pressured gross margin.

• Lower selling and distribution expenses and finance costs partly offset higher administrative expenses and reduced other income.

Financial highlights

• Gross profit was RM55.505m versus RM58.526m; profit before tax was RM18.660m versus RM23.662m.

• EPS was 1.43 sen versus 1.64 sen; total comprehensive income was RM17.450m versus RM16.351m.

• Other income fell to RM1.1m from RM3.4m, mainly due to the absence of an exchange gain; selling and distribution expenses declined to RM24.2m from RM26.6m.

• Administrative and other operating expenses rose to RM12.9m from RM10.3m; finance costs decreased to RM0.8m from RM1.3m.

• Operating cash flow was RM16.768m versus RM21.279m; cash and cash equivalents were RM27.942m versus RM38.025m at June 2023.

Outlook and guidance

• Priorities include building on core strengths, exploring business opportunities and careful cost control to support margins and competitiveness amid high inflation.

• Management anticipated sufficient working capital for operations, capital expenditure and other cash requirements.

• Remaining listing proceeds are intended for distribution capacity, own products, e-commerce and strategic investments, with utilization expected through December 2024.