Selangor Journal

KPS revenue rose 46 pct to RM323.8 mln in second quarter of 2021

By Nasuha Badrul Huzaini

SHAH ALAM, Aug 27 — Kumpulan Perangsang Selangor Berhad (KPS) recorded a 46 per cent year-on-year growth in revenue to RM323.8 million for the quarter ended June 20, 2021.

The higher revenue is backed by the higher sales from the manufacturing business with more demands recorded through the quarter as global economies and businesses recovered from performance decline.

The company’s manufacturing business comprising Toyoplas, Century Bond Bhd, CPI Penang Sdn Bhd, King Koil Manufacturing West LLC and King Koil Sales Inc recorded 55.5 per cent revenue growth to RM276.6 million compared to RM177.9 million in the corresponding quarter last year.

Operating Profit leapt to RM15.9 million from a loss position and Profit Attributable to the Owners of the Parent turned around to RM1.6 million from RM11.4 million loss in the corresponding quarter last year.

With improvement in sales, higher other income, and lower finance costs, KPS posted Profit before Tax and Zakat of RM9.7 million, turning around from the RM8.6 million loss it registered in the prior-year quarter.

KPS managing director cum group executive officer Ahmad Fariz Hassan said the positive secular trend in demand they see across the key end markets regionally and globally fanned the tailwind that helped them stabilise sales across most manufacturing businesses within the Group.

“However, for our manufacturing, supply chain challenges persisted. The shortage of Integrated Circuit (IC) chips has thwarted the flow of orders from our automotive and consumer electronics customers; the shortage of global freight capacity has fluctuated order volumes of our subsidiary companies having regional and global presence, and the shortage of raw materials such as polyurethane foam and resin has pushed input prices.

“All of which have resulted in higher Cost of Goods Sold (COGS) and, consequently, lower margins.

“These challenges have shifted our earlier expectations on the pace of the revenue growth and robustness of the profitability for the quarter,” said Ahmad Fariz.

Moving forward, KPS expects to progress moderately in the second half, mindful of the supply chain challenges including the shortage in IC chips, escalated resin and paper prices, and limited freight capacity, all of which are expected to persist for the remainder of the year.

“To help it manage this complexity, the Group plans to recover from the impact of input cost escalating. One of such actions is to take a more sustainable price-to-cost position by expanding the cost-pass-through mechanism to a more extensive customer base while supporting demand.

“Guided by long-term business strategy and aspects of enterprise risk management, we shall continue with the tasks of executing our business strategy and working towards ensuring resilience to safeguard business viability and profitability within the Group.

“However, we are equally circumspect about the prospect of the business in the immediate term, heeding from the cautionary signals in the operating environment,” he said.

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