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Sunday, November 29, 2015

WTK Holding's 3Q profit almost doubles on higher sales of plywood products, forex gain

KUALA LUMPUR (Nov 27): WTK Holdings Bhd ( Valuation: 1.40, Fundamental: 1.65)'s net profit for the third quarter ended Sept 30, 2015 (3QFY15) almost doubled to RM21.2 million or 4.44 sen per share from RM11.9 million or 2.74 sen per share a year ago, mainly due to the increase in sales of plywood products and a stronger US dollar appreciation.

Revenue for the period rose 22.9% to RM191.3 million from RM155.56 million in 3QFY14, the group's filing to Bursa Malaysia shows.

Net profit for the nine months to Sept 30, 2015 (9MFY15), however, decreased 11.9% to RM33.14 million or 6.94 sen per share from RM37.65 million or 8.67 sen per share, while revenue increased marginally to RM515.72 million from RM506.14 million in 9MFY14.

For its timber division, the group registered a profit before tax (PBT) of RM23.1 million in 3QFY15, a 63.8% increase from RM14.1 million a year ago.

"The group's key export markets for round logs were India (70%), Vietnam (24%) and Singapore (6%). The export markets for plywood for the quarter under review were Japan (82%), Taiwan (16%) and other countries (2%)," its filing said.

The group's plantation division registered a revenue of RM2.2 million for 3QFY15 with a loss before tax of RM1.6 million.

"The loss before tax was mainly due to insufficient fresh fruit bunches production volume as the palms are still in their early mature age profile coupled with weak crude palm oil prices to cover the operational costs," it said.

PBT for its manufacturing and trading division increased 61.3% to RM5 million compared to RM3.1 million registered in 3QFY14, due to US dollar-based export sales.

Net profit for its oil and gas division came in at RM900,000 while revenue was RM6 million for 3QFY15.

Moving forward, the group said that it is extremely cautious in view of the challenging global economic environment, and will adopt effective cost management and products quality control to stay resilient and maintain its competitiveness in the market.

"The strengthening of US dollar will continue to benefit our group's exports in the coming quarters," the group said.

Shares in WTK Holdings closed unchanged at RM1.24, with 815,900 shares traded.

Based on its closing price, the counter has a market capitalisation of RM587.3 million.
(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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