Mestron’s 3Q net earnings jumps 3-fold on hike in demand for telco poles

BUOYED by higher sales demand for telecommunication tower and outdoor lighting products, specialty pole maker Mestron Holdings Bhd saw its net profit jumped by more than three times to RM3.35 mil in its 3Q FY2022 ended Sept 30, 2022 from RM1 mil in the corresponding quarter a year ago.

For 3Q FY2022, revenue surged by 160.5% year-on-year (yoy) to RM37.2 mil from RM14.26 mil in 3Q FY2021.

A filing with Bursa Malaysia today shows that the increase in revenue was mainly attributed to an increase in sales demand for standard poles, lanterns and specialty poles mainly for the telco segment during the quarter under review.

In a nutshell, the group’s revenue was mainly derived from the manufacturing segment which accounts for 87% of the total revenue in 3Q FY2022. The Malaysian market remains its largest, accounting for about 95.6% of Mestron’s total revenue in 3Q FY2022.

“The earnings growth recorded is in line with the group’s expectation as the roll-out of 5G network nationwide has helped to sustain demand for our speciality poles for the telco segment,” commented Mestron’s managing director Por Teong Eng.

Por Teong Eng

“We have established ourselves as one of the key players in the development of telco infrastructure in Malaysia and this result put us in a strong position to record another strong financial year.”

Indeed, Mestron’s strong 3Q FY2022 enabled the group to record a rise of 153.9% year-on-year (yoy) in its net profit to RM6.7 mil during its 9M FY2022 from RM2.6 mil in 9M FY2021.

Revenue during that period jumped by 122.8% to RM82.1 mil from RM36.9 mil in its 9M FY2021 mainly driven by the sale of standard poles and speciality Poles mainly for the telco segment. During its 9M FY2022, the Malaysian market contributed about 94.8% to the group’s total revenue.

“We have seen a faster pick-up in orders for telco towers projects amid the faster roll-out of telco infrastructure projects this year,” revealed Por.

“The re-opening of the economy has helped to escalate the roll-out of the projects. Given our track record in the industry, we are confident that we will continue to secure new contracts from different telco infrastructure projects.”

Despite the optimistic outlook, Por pointed to the need of remaining cautious about navigating some of the near-term challenges, including the global supply chain disruptions, rising global commodity and raw material prices, and high shipping costs.

“With the global economic uncertainty in place, we will exercise extra vigilance to navigate these challenges while striving to deliver satisfactory performance this year,” he enthused. “At the same time, we will also explore other opportunities to diversify our business and expand our sources of revenue to future-proof our business model.”

At 2.40pm, Mestron was up 1.5 sen or 3.33% at 46,5 sen with 12 million shares traded, thus valuing the company at RM433 mil. – Nov 23. 2022

Subscribe and get top news delivered to your Inbox everyday for FREE