Pole specialist Mestron continues strong earnings momentum into 1Q FY2023

SPECIALTY pole maker Mestron Holdings Bhd has extended its earnings momentum into its 1Q FY2023 ended Dec 31, 2023 with its net earnings soaring 88.2% following a record-setting performance in the previous fiscal year.

Underlying such trend, the group’s net profit surged to RM2.56 mil (1Q FY2022: RM1.38 mil) while its revenue firmed 25.6% year-on-year (yoy) to RM26.90 mil (1Q FY2022: RM21.41 mil).

This notable financial performance comes on the back of the record-setting FY2022 where Mestron posted a net profit of RM10.06 mil.

“This quarter’s exceptional financial performance is a testament to the rising demand for our specialty poles, telecommunication (telco) poles and accessories,” commented Mestron’s managing director Por Teong Eng.

According to him, the faster roll-out of telco infrastructure projects and the 5G network nationwide support demand for MHB’s speciality poles within the telco segment.

“We continue to see strong orders for telco tower projects as the roll-out of telco infrastructure projects accelerated,” he noted, adding that the group’s strong track record will pave way for it to secure new contracts from different telco infrastructure projects.

Por Teong Eng

This robust revenue growth coupled with reduced prices of critical raw materials such as steel plates and pipes has propelled net profit while fostering a healthier margin.

“Our strategic focus on innovation and quality assurance has paid off, leading to an exciting growth trajectory in our sales. This will put us in a strong position to maintain our earnings growth in the near term despite the challenging business environment,” justified Por.

According to the group’s filing with Bursa Malaysia, there are potential challenges on the horizon that could affect its financial performance, specifically foreign exchange (forex) volatility and increasing competition.

“With the current uncertainty in the local and international economy due to forex volatility and increase in competition with lower quality products, the group’s performance for the financial year ending Dec 31, 2023 will remain challenging,” projected Mestron.

“However, the group will exercise extra vigilance in the business and will strive to deliver satisfactory performance for the year.”

The stock exchange filing added that Mestron will explore other business opportunities and is looking to diversify the business to expand its sources of revenue and include other sources of recurring revenue as part of the source of the group’s business income.

At the end of yesterday’s (May 26) closing, Mestron was unchanged at 39 sen with 11.04 million shares traded, thus valuing the company at RM384 mil. – May 27, 2023

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