THE construction business venture by Malaysia’s leading manufacturer of rubberwood furniture, Sand Nisko Capital Bhd, has gotten off to a fine start with the management optimistic that its construction arm will be a key growth driver going forward.
The group’s construction business prospect is bright as evident by the order book replenishment with the acceptance of seven letters of award for projects worth a contract value of around RM34.5 mil.
“This will put us in a strong growth trajectory going forward,” projected Sand Nisko’s managing director Emily Sow Mei Chet when commenting on the company’s 2Q FY2021 ended June 30, 2021’s results which saw its revenue jumped 86.6% year-on-year (yoy) to RM12.53 mil (2Q FY2020: RM6.67).
Meanwhile, Sand Nisko’s core profit improved by 46.15% yoy to RM1.9 mil (2Q FY2020: RM1.3 mil). The stronger financial performance was mainly contributed by its construction business as well as the recovery of its furniture manufacturing and trading business segment despite the effect of movement control order (MCO 3.0) towards end-2Q FY2021.
However, Sand Nisko’s net profit fell by 44.4% to RM1.5 mil in 2Q FY2021 from RM2.74 mil a year ago mainly due to recognition of RM400,000 share option expenses during the quarter and absence of RM1.2 mil one-off gain on disposal of a subsidiary in 2Q FY2020.
“We’re proud to announce another quarter of strong financial performance for the group as seen by our topline and core profit growth,” noted Sow. “This is a testimony to the success of our transformation into a construction player while our furniture manufacturing business has also rebounded strongly during the quarter under review.”
The performance has led to a strong 1H FY2021 result of which Sand Nisko’s revenue jumped by 145% to RM34.75 mil from RM14.2 mil recorded during 1H FY2020.
Apart from gaining a better topline, the group’s net profit rose by 58.3% yoy to RM3.83 mil in 1H FY2021 from RM2.33 mil despite the additional share option expenses and absence of the one-off gain seen in the 1H FY2020.
Sow further pointed out that the group has kick-started the transformation plan for its furniture manufacturing business from the previous original equipment manufacturer (OEM) build-to-order model to a design-build-sell model which is aimed at improving production efficiencies, saving labour costs and achieving a wider reach of customers.
This will play a vital role for the group to modernise its existing core business and to tap on the strong demand in the post COVID-19 world.
Moving forward, Sand Nisko is confident that the outlook remains positive despite the challenges from the prolonged COVID-19 pandemic and the lockdown imposed to contain the infections.
“As the country’s vaccination rollout continues to progress, the group is also positive that the current business segment that has yet to recover, notably rental income, will return to a more stable level going forward, barring any future lockdowns that require further rental support,” added Sow.
At the close of today’s mid-day trading, Sand Nisko was up 9 sen or 6.67% to RM1.44 with 10.36 million shares traded, thus valuing the company at RM163 mil. Year-to-date, Sand Nisko has climbed 343% from 32.5 sen on Jan 4. – Aug 20, 2021
