KUALA LUMPUR (May 20): Health products manufacturer Kotra Industries Bhd (KL:KOTRA) said its net profit dropped 61% to RM6.83 million for its third quarter ended March 31, 2024 (3QFY2024), from RM17.5 million a year ago, mainly due to a less favourable product mix and lower sales.

Earnings per share fell to 4.61 sen from 11.82 sen, said the owner of the health supplement brand Appeton in a bourse filing on Monday.

Revenue for the quarter fell 6% to RM55.88 million from RM59.4 million in 3QFY2023 due to weaker sales of pharmaceutical products in both the local and export markets, as well as supplement products in the local market.

Coupled with higher tax expenses and the reversal of deferred tax assets from prior tax losses and incentives, the group's net profit margin slipped to 12.23% from 29.45% previously.

No dividend was declared for the quarter.

For the cumulative nine-month period, Kotra's net profit fell 38% to RM32.11 million or 21.65 sen per share, from RM52.15 million or 35.23 sen per share in the first nine months of FY2023.

Nine-month revenue decreased 11% to RM166.73 million from RM186.4 million due to lower sales of supplement products, the group said.

It added that there was a spike in demand for medication due to major prescription shortages during the period, but this demand has since normalised.

Looking ahead, Kotra said the current economic uncertainty, driven by inflation and exchange rate volatility, is potentially increasing operational costs and weakening consumer purchasing power.

Nevertheless, the group said it is committed to prudent decision-making and sees continued profitability amid sustained product demand.

Shares in Kotra settled eight sen or 1.71% higher at RM4.76 on Monday, valuing the group at RM705.98 million. Year to date, the counter has fallen 1.5%.