SYF Resources' 4Q net profit falls 43.4% on raw material shortage, cost increase

KUALA LUMPUR (Sept 28): SYF Resources Bhd said its fourth quarter net profit fell 43.4% due to higher raw material costs, and a shortage of raw materials and labour, which affected production efficiency in the group's medium-density fibreboard (MDF) and rubberwood furniture manufacturing segments.

Net profit for the quarter ended July 31, 2017 (4QFY17) fell to RM4.4 million or 0.71 sen per share, from RM7.8 million or 1.28 sen per share in the previous corresponding quarter.

In a filing with Bursa Malaysia, the group said its property segment also saw a reduced profit margin as a result of additional development costs incurred on its ongoing Kiara Plaza apartment project in Semenyih.

Apart from that, finance cost, which increased significantly by RM2.2 million due to higher borrowings for the purpose of capital expenditure and working capital, also lowered profit, the group said.

Quarterly revenue rose 2.1% to RM155.4 million from RM152.2 million a year earlier, mainly due to higher sale from both rubberwood furniture and boards segments, which improved by RM4.1 million and RM7.3 million respectively, as a result of better selling prices from the segments and higher output from MDF plant.

The group, however, saw its property segment revenue decrease by RM7.5 million as Kiara Plaza is at final stage of completion. During the quarter, a newly launched residential project in Sungai Long, Iris Residence, contributed about RM15.8 million to the revenue.

For the full financial year, SYF Resources' net profit slipped 8.7% to RM34.9 million or 5.67 sen per share, from RM38.2 million or 6.25 sen a share in the previous year. Revenue rose 14.3% to RM517.9 million from RM453.2 million.

SYF Resources said its directors have approved the incorporation of a revaluation surplus of RM9.3 million into the financial statements for the financial year.

The purpose of revaluation, it said, was in line with its accounting policy to revalue properties every five years in order to reflect the current market value of properties.

The revaluation represents an increase of two sen in its net asset per share as of July 31.

SYF Resources has proposed a first and final dividend of 1.5 sen per share.

Its share price gained 1.05% to close at 48 sen today with 157,800 shares traded, giving a market capitalisation of RM299 million. — theedgemarkets.com

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