AFTER two consecutive quarters of losses, Malaysia’s rubberwood furniture manufacturer Sand Nisko Capital Bhd (formerly Len Cheong Holding Bhd) has returned to the black spurred by a recovery in its manufacturing and trading business segment amid a turnaround in the global furniture industry.
According to a filing with Bursa Malaysia, Sand Nisko posted a net profit of RM2.3 mil in its 1Q FY2021 after incurring a net loss of RM400,000 in the corresponding quarter a year ago.
The turnaround is mainly driven by its manufacturing and trading business segment which recorded a profit of RM1.5 mil from a pre-tax loss of RM800,000 in 1Q FY2020.
Underpinning the turnaround of Sand Nisko’s earnings was a three-fold jump in revenue to RM22.23 mil during the quarter under review from RM7.56 mil a year ago.
“The turnaround in the group’s financial results is a good start for our FY2021 ending Dec 31 as we have been struggling with losses since FY2017,” commented Sand Nisko’s managing director Emily Sow Mei Chet.
“We are cautiously optimistic that we could sustain the recovery of our businesses for the rest of the year, driven mainly by the strong outlook for the global furniture market and our diversification plans into the construction business segment.”
Sand Nisko’s share price climbed to its highest in five years yesterday to 95.5 sen, up 17.5 sen or 22.44% with 10.97 million shares traded, thus valuing the company at RM99 mil.
Sow expects Sand Nisko to be able to maintain its growth momentum in the coming months in view of rising demand for furniture products globally.
Aside from the strong momentum in its manufacturing and trading businesses, the company’s construction businesses have also picked up during the current quarter with the group securing new construction projects around Melaka’s Krubong and Bukit Lintang areas.
The group expects to bid for more tenders as well as negotiate for new construction projects over the next two quarters. However, the group’s plans are subject to the country’s management of the on-going COVID-19 pandemic.
“With some of the new restrictions imposed following the latest virus outbreak, there might be some disruption on our business activities,” cautioned Sow. “However, we are confident that the impact will be minimal as we have already complied with a strict SOP (standard operating procedure) prior to the latest wave of infections.”
She further stressed that a turnaround in earnings is vital following a difficult year amid the COVID-19 pandemic.
“The past year has been a challenging year for all businesses and we were not spared from disruptions brought about by the COVID-19 pandemic,” she recalled.
“However, we have seen a surge in demand for furniture globally now. As a result, new orders have been keeping us busy, hence we’re cautiously optimistic that the group could sustain our growth momentum throughout FY2021.” – May 28, 2021
