BURSA Malaysia Main Market-listed Federal International Holdings Bhd [formerly Federal Furniture Holdings (M) Bhd] (FIHB) is excited over the group’s prospect in the upcoming financial year amid the transition to the COVID-19 endemic phase as well as the acceleration of its venture into renewable energy (RE).
This comes on the back of the group’s strong finish to its financial year ended June 30, 2022 during which its net profit more than doubled to RM13.2 mil, attributable to the sale of a furniture factory for RM6.1 mil.
The group’s revenue grew by 8.5% to RM125.9 mil, led by its construction and interior-fit-out (IFO) business segments.
Going forward, FIHB is excited over the anticipated economic recovery in Malaysia amid the re-opening of the economy and resumption of its construction projects, the recovery in the hospitality industry and progress of its RE venture.
“We are currently in the midst of negotiating some construction contracts which will boost our order book while our unbilled order book supports earnings in the near-term,” FIHB’s executive director Datuk Choy Wai Ceong pointed out.
“The group is negotiating construction contracts worth more than RM250 mil while FIHB’s unbilled order book stood at RM110 mil.”
Nevertheless, Choy shared that the outlook is mired by the current geopolitical tension as evident in the Russian-Ukraine conflict, global inflationary pressure, rising interest rates, higher input costs, and disruption of supply chain.
“Locally, Malaysia is also struggling with the weak ringgit. At the same time, the implementation of the new minimum wage and the labour shortages have led to an increase in labour costs,” he further cautioned.
On its longer-term expansion strategy, Choy expects FIHB’s venture into the RE segment to gain momentum.
Its joint-controlled entity – WREA RE Assets Sdn Bhd together with Asia Greentech Fund (AGTF) – has to-date completed the acquisitions of solar plants with a total capacity of 15MW.
On the other hand, Sunview Group Bhd which is WREA’s technical partner and a leading solar power system provider and installer has recently launched its prospectus in conjunction with its listing on the ACE Market of Bursa Malaysia in 4Q 2022. As of Oct 3, FIHB has a 4.9% direct stake in Sunview.
“The upcoming listing of Sunview will help to drive the development of RE-related projects in Malaysia while escalating the expansion of our footprint in the RE segment,” envisages Choy. “The expansion is in line with the group’s objective to diversify its earnings stream as well as to realise our ESG (environmental, social and governance) agenda.”
At the close of yesterday’s (Oct 3) trading, FIHB was unchanged at 52.5 sen with 80,400 shares traded, thus valuing the company at RM74 mil. – Oct 4, 2022
