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Friday, August 26, 2016

Stronger beverage exports drive Oldtown’s 1Q profit up 46%

Stronger beverage exports drive Oldtown’s 1Q profit up 46%
By Gho Chee Yuan / theedgemarkets.com | August 25, 2016 : 11:32 PM MYT

KUALA LUMPUR (Aug 25): Oldtown Bhd posted a 46.3% jump in net profit for its first quarter ended June 30, 2016 (1QFY17) to RM13.88 million, from RM9.49 million a year ago, driven by a stronger beverage manufacturing segment.

According to its unaudited financial statement on Bursa Malaysia, the coffee chain operator's beverage manufacturing segment’s pretax profit gained 69% to RM15.52 million, from RM9.21 million a year earlier; while revenue gained 20.6%, on higher export sales achieved.

Quarterly revenue gained 9.4% to RM102.89 million, from RM94.06 million.

There was no dividend proposed in the current quarter.

As at June 30, 2016, Oldtown has 240 café outlets — 206 in Malaysia, 10 in Singapore, 23 in Indonesia and one in Australia.

In contrast with its stronger beverage manufacturing segment, revenue from its café chain operation slipped 1.5% to RM45.54 million, which caused profit before tax to edge 3% lower to RM4.33 million.

Meanwhile, OldTown highlighted that both its café chain segment and manufacturing of beverages segment operate under an integrated business model, which enables the group to mitigate price fluctuations in raw materials, while preserving margins.

"It also allows for further market share growth, without additional investment in sales, marketing and logistics," it added.

Oldtown said it would continue to invest in advertising, promotional and marketing activities to promote and strengthen its brand name.

Having said that, it added that outlook for both its café chain operation, and manufacturing of beverages segments, remains competitive and challenging.

Shares in Oldtown fell four sen or 2.2% to settle at RM1.78 today, for a market value of RM803.62 million.

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