KUALA LUMPUR (Aug 22): Oriental Holdings Bhd (KL:ORIENT) said its net profit for the second quarter ended June 30, 2024 (2QFY2024) shrunk nearly 70% to RM38.19 million from RM125.2 million a year ago.

The significant drop in net profit was largely attributed to a 325% year-on-year (y-o-y) increase in finance costs, which soared to RM43.74 million from RM10.28 million, while tax expenses soared 63% y-o-y to RM25.81 million from RM15.8 million.

Additionally, Oriental Holdings experienced a loss after tax from equity account associates of RM394,000, a stark contrast to the RM11.11 million profit recorded in the previous year, according to its filing with Bursa Malaysia.

Despite this, revenue for 2QFY2024 increased by 17.4% to RM1.18 billion from RM1 billion in 2QFY2023, driven by higher contributions from the automotive segment, which saw a rise in car sales, particularly through retail operations in Malaysia and Singapore.

The group declared an interim single-tier dividend of 20 sen per share, amounting to RM124.07 million for the quarter under review. The dates for entitlement and payment will be announced at a later time.

Over the past three financial years, Oriental Holdings, which operates across the plastics, plantation, automotive, hotels and resorts, and healthcare sectors, has consistently paid a dividend of 40 sen per share to its shareholders.

For the cumulative six months ended June 30 (6MFY2024), Oriental Holdings’ net profit climbed 63% to RM357.66 million, from RM219.44 million a year ago, as revenue rose 20.3% to RM2.37 billion from RM1.97 billion.

Looking ahead, Oriental Holdings said its automotive segment will continue to contribute to the group’s performance under competitive market conditions, with strong and aggressive promotional campaigns by industry players.

Given the automotive industry's rapid changes due to technological advancements, regulatory shifts, market demands, interest rates and global events, the group said that management will remain well-informed and proactive as they navigate the uncertainties that lie ahead in 2024.

“The plantation segment’s management will take necessary steps to ensure that all estates and mills remain efficient, cost effective and competitive. The forex exposure of the borrowings will be closely monitored and managed.

“The hotels and resorts segment will continue to maintain and promote high standards of ethics and integrity across the segment while embracing sustainability and technological integration. The healthcare segment will continue to focus on strengthening brand awareness and positioning the hospital for sustainable growth,” it added.

At Thursday’s closing bell, shares of Oriental Holdings gained seven sen or 1.02% to RM6.96, giving it a market capitalisation of RM4.32 billion.