KUALA LUMPUR (Aug 13): Seng Fong Holdings Bhd (KL:SENFONG) said its net profit jumped by more than five folds to RM16.5 million in its fourth quarter ended June 30, 2024 (4QFY2024), from RM2.98 million a year earlier, driven by higher sales volume coupled with reduced diesel costs following the operation of both biomass systems.
Earnings per share rose to 2.29 sen from 0.41 sen, the rubber processor and exporter said in a filing to the stock exchange.
Revenue increased 38.7% to RM331.3 million from RM238.8 million in 4QFY2023, primarily due to higher contributions from the processing segment.
Sales volume in the processing segment grew 18.7% year-on-year to 45,239 tonnes from 38,102 tonnes, attributed to extended production hours with the addition of a second shift at all three factories.
The group declared a fourth interim dividend of 1.5 sen per share, payable on Sept 20, bringing the total dividend for FY2024 to 5.50 sen per share, compared to three sen in FY2023.
For the full year, Seng Fong's net profit more than doubled to RM57.3 million or 7.94 sen per share, from RM22.6 million or 3.13 sen per share in FY2023. Full-year revenue rose 21.5% to RM1.14 billion from RM937 million.
Notably, the group's top- and bottom-line performance has been on the rise since its listing on the Main Market of Bursa Malaysia in 2022.
Seng Fong said it will continue its strategy of increasing production hours across its three factories, aiming to grow market share by enhancing the utilisation rate of total annual capacity and automating processing.
The group raised RM21.8 million through a private placement in April to fund the installation of smart rubber manufacturing equipment in its factories, which incorporates intelligent technology and automation to reduce manual labour and improve product quality and consistency.
Additionally, the group received an automation capital allowance incentive from the Malaysian Investment Development Authority, providing 200% on the first RM10 million of expenditure from 2023 to 2027, supporting the adoption of Industry 4.0 elements.
Seng Fong said it remains cautiously optimistic about its prospects for FY2025 despite potential challenges from foreign exchange movements, adding that it will focus on sustainable growth while maintaining prudence in operations.
Shares in Seng Fong closed unchanged at RM1.19 on Tuesday, valuing the group at RM858.77 million.