KUALA LUMPUR, Malaysia – Poh Huat Resources Holdings Berhad, the parent company of Poh Huat Furniture Industries, reported an increase in revenues and gross profits for the latest quarter ended Oct. 31.
Total revenues were RM216.7 million, up 12.8% from the RM192.08 reported for the same period last year. For the full year to date, revenues totaled RM 659.5, down 5.9% from the RM701 million reported last year.
Gross profits for the quarter totaled RM48.6 million, up 38.3% from the RM35.11 million reported last year. Year to date, gross profits totaled RM119.8 million, down 2.4% from the RM122.8 million reported last year.
Basic earnings per share for the quarter were 9.20 sen, compared to 6.55 sen last year. Year to date, basic earnings per share totaled 22.14 sen, compared to 22.91 sen last year.
The company produces residential furniture in both Malaysia and Vietnam.
In its report the company noted that furniture production and shipments from its Malaysia and Vietnam operations continued to ramp up following a gradual resumption of production following the halt of manufacturing in March and April during the first wave of COVID-19.
“As reported previously, we received sustained, long dated orders from US importers who have anticipated supply chain interruption due to the movement restriction imposed in most countries,” the company said. “Demand for home and home-office furniture, the mainstay of our operations continued to be strong as the “stay and work from home” precaution is expected to prevail in the foreseeable future.”
The company said that despite lower turnover (revenues) of RM84.72 million during the quarter, compared to RM89.8 million in the same period last year, a 5.7% drop, the Malaysia operations had a marginally higher gross profit of RM19.23 million compared to RM19.03 million in the same period last year.
“Gross profit margin improved to 22.7% during the current reporting period from 21.2% in the previous year reporting period due mainly to better handling of raw materials,” the company said. “Selling expenses as a percentage of sales were slightly lower during the reporting period due to lower level of shipments while fixed administrative expenses as a percentage of sales inched up due to the lower turnover during the current reporting period.”
In Vietnam, the company reported RM132 million in revenues during the quarter, compared to RM102.23 million last year, a 29.1% increase. Gross profits totaled RM27.2 million, compared to RM16 million last year.
“Gross profit margin improved significantly to 20.6% from 15.7% previously as our Vietnamese operations enjoyed across-the-board improvement in manufacturing costs due to lower material prices, better labour efficiency and better absorption of manufacturing overheads due to the higher level of production,” the company said. “Profit before tax increased by 81.2% to RM17.08 million during the current reporting period from RM9.43 million in the previous year’s reporting period.”
The company said that due to increases in demand and planned inventory building by U.S. importers, shipments from both the Malaysian and Vietnamese operations rose substantially during the quarter.
“In Malaysia, turnover grew by more than 40%, whereas Vietnam’s turnover grew by a whopping 80%,” the company noted. “On the Group level, absolute gross profit grew 82.7%, from RM25.50 million in the preceding reporting period to RM46.58 million in the current reporting period. Gross profit margin improved from 19.2% to 21.5% on the backdrop of stable raw material prices and better overhead absorption from the higher plant utilization rate.”