DKSH's hopes for better margins in FY19
Stephanie Jacob | 03 May 2019 00:30
DKSH Holdings (Malaysia) Bhd’s FY18 is a tale of two halves. On one hand, its FY18 ended Dec 31, 2018 revenue increased by 9.1% to hit a significant RM6 bil milestone from RM5.5 bil in FY17.
However, its net profit narrowed to RM44.6 mil from the RM52.1 mil seen in FY17 as margin squeeze and higher interest costs hit its bottomline.
The main culprit was DKSH’s marketing and distribution segment. Although its revenue grew to RM2.83 bil in FY18, up from RM2.63 bil in FY17, its pre-tax profit contracted by 52.8% to RM21.6 mil from RM45.7 mil. The weak margins from this segment were significant enough to cause Public Investment Bank to highlight it as among the reasons for it to downgrade the counter in February.
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