Etika full-year profit up 24.9% to RM56m

Revenue rose to almost RM1 billion.

In a release, Etika International Holdings Limited (Etika), a manufacturer and distributor of sweetened condensed milk, announced an improved revenue of RM984.8 million for the full year ended September 30, 2012 (FY2012).

The 12.0% increase compared to RM879.6 million recorded in the previous corresponding year (FY2011) was achieved despite difficult market conditions amidst global macroeconomic weakness. Earnings before Interest & Tax (EBIT) improved 24.9% year-on-year from RM44.8 million to RM56.0 million in FY2012, after excluding the one-off negative goodwill of RM10.5 million recorded in FY2011 for the acquisition of two subsidiaries in Indonesia.

Etika’s Group Chairman, Dato’ Jaya Tan said, “We are encouraged by the Group’s overall performance for 2012, having achieved a commendable increase in revenue. We attained better topline performance for three of our four business divisions against the backdrop of a continuing uncertain global economic situation and competitive conditions in our markets.

To reward our shareholders for their continuing support in these challenging times, we are recommending a final tax exempt (1-tier) dividend of 0.3 Singapore cents per share.

Added Group Chief Executive Officer, Dato’ Kamal Tan, “During the year, the  Group continued to channel efforts at growing the business’ long-term prospects, executing our expansion plans progressively, including the commencement of a sweetened condensed milk production facility in Indonesia and an additional UHT production line in Malaysia, as well as a new beverage plant in New Zealand.

We remain prudent amidst a volatile world economy, and continue to take steps to build upon our strong brand equity and market position through the widening of our distribution networks and product range.” 

For its growth forecast, the Group continues to see encouraging sales volumes and prices for both its domestic and export markets in its core Dairies Division.

Said Dato’ Kamal Tan, "We are cautiously optimistic that we will be able to achieve reasonable growth even in this current global economic environment, given the current demand for our existing products and the expected additional sales of UHT milk and sweetened condensed milk following the commencement of the two products’ respective new product lines.”

While demand is improving for the Group’s Trading and Frozen Food Division, the Group acknowledges that there will be keen competition in this division given the anticipated entry of new players. Pricing and supplies for meat items from Australia and New Zealand has remained stable. There are slight price increases in dairy products, frozen vegetables and French Fries. However, the overall effect  is mitigated by the weakened US Dollar. Demand for its proprietary products is expected to grow steadily with the opening of more shopping malls and restaurant chains, generating new business opportunities.