SPECIALTY pole maker Mestron Holdings Bhd has maintained a strong growth momentum in its 1H FY2022 ended June 30, 2022 with both the group’s revenue and net profit more than doubled to RM45.54 mil and RM3.39 mil respectively.
The surge in revenue during the six-month period was attributable to an increase in sales demand for standard poles, lanterns and specialty poles for the telecommunication sector. The group’s revenue was primarily driven by the manufacturing sector which accounts for 81.1% of its total revenue.
Meanwhile, Mestron’s higher net profit was mainly due to a reduction in price of raw materials such as steel plates and steel pipes as well as higher sales demand for outdoor lighting products.
“It has been a great start to the year as we gradually move beyond the COVID-19 pandemic. Despite the challenging operating environment, we are proud to have recorded a strong earnings growth during 1HFY2022,” commented the company’s managing director Por Teong Eng.
Currently, Mestron is actively pursuing opportunities to drive its revenue growth, especially within the telco sector.
“Our capacity and capability to manufacture telco poles and towers put us in a good position to tap into the strong demand in the telco sector amid the roll-out of 5G deployment and the Government’s initiatives to bridge connectivity between developed and underserved areas,” opined Por.
Mestron had during its 2Q FY2022 ended June 30, 2022 managed to maintain its momentum growth as revenue more than doubled to RM24.13 mil while net profit jumped to RM2.01 mil from a mere RM135,000 a year ago.
Despite Mestron’s encouraging performance during the 2Q FY2022 and 1H FY2022, Por shared that higher operating costs for the manufacturing sector will continue to pose challenges for the group going forward although its earnings visibility remains intact and supported by an order book of RM50 mil as of end-June 2022.
A Bursa Malaysia filing added that the group expects several headwinds to remain because of the continuing Russia-Ukraine conflict as well as on-going lockdowns in some of the major cities in China.
“These events have caused further strain on global supply chains which have led to rising global commodity and raw material prices as well as global logistic disruptions and high shipping costs,” noted Mestron.
“In addition, the recent implementation of the new minimum wage standard in Malaysia will result in higher operating costs for the manufacturing sector.”
At the close of yesterday’s (Aug 20) trading, Mestron was unchanged at 36.5 sen with 11.43 million shares traded, thus valuing the company at RM340 mil. – Aug 20, 2022
