Etika net profit erodes 32.3% to RM5.5m

Due to higher depreciation and forex losses.

Singapore Exchange Catalist-listed food & beverage group Etika International Holdings Limited (Etika) has announced a profit after income tax of RM5.5 million on the back of a revenue of RM260.2 million for the first quarter ended December 31, 2013 (Q1FY2014).

The Group’s revenue held steady as compared to the previous corresponding period of RM258.2 million (Q1FY2013). Net profit slid 32.3% from RM8.1 million in Q1FY2013 to RM5.5 million in Q1FY2014, mainly due to higher administrative and other operating expenses as a result of higher depreciation charges and foreign exchange loss. This was mitigated by the reduction in selling and marketing expenses due to lower advertising and promotion expenses incurred and a decrease in warehouse and distribution expenses with classification of depreciation to cost of sales.

Etika’s Group Chairman, Dato’ Jaya Tan said, “Amidst intense market competition, revenue has climbed marginally, buoyed by our Trading and Frozen Food and core Dairies segments.

“We continue to make good progress in our core Dairies Division, with the finetuning of our strategy for a greater focus on the export markets, resulting in a marked improvement in sales volume to the Asian and African markets. At the same time, we will continue to nurture well both our primary market, Malaysia, and the newer Indonesian market to maintain our competitive edge and market share. We’ve also seen creditable sales performances from our Trading and Frozen Food as well as Nutrition Divisions notwithstanding challenging market conditions. Our overall sales performance was, however, affected by lower turnover from our noodle business in Indonesia.

“With intense competition and cost hikes expected for this financial year, our emphasis going forward is to sharpen our competitive edge by building a strong branding for our products, broadening our market reach as well as widening our product offerings across all business segments. At the same time, we will further enhance our operational efficiencies, as we work towards improving our profitability.”