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- 3QFY6/24 core net profit came in at RM7.7m (74.8% yoy) after accounting for one-off losses of RM1.7m (mainly allowance for slow-moving inventories and impairment loss on receivables).
- This brought 1HFY24 core net profit to RM21.4m (+98.2% yoy); above Bloomberg expectations (89.2% of FY24 net profit estimates).
- The earnings beat in 3QFY24 was mainly due to better-than-expected sales of personal lubricants that also led to higher-than-expected profitability of its sales mix.
- 9MFY24 revenue dipped by 3.3% yoy due to lower condom sales to the tender segment. However, 9MFY24 EBITDA margins rose 4.1% pts yoy to 13.6%, while 9MFY24 core net profit rose 98.2% yoy to RM21.4m. This was mainly driven by a more profitable sales mix (more condom sales to the commercial segment and higher personal lubricant sales), the impact of the weak ringgit, and higher operating leverage.
- This was despite increases in both administrative costs (+15.0% yoy); we attribute to R&D cost for upcoming new product launches) while distribution expenses were also slightly higher (+2.7% yoy; drop in freight costs).
- On a qoq basis, 3QFY24 revenue was flattish at RM127m (-0.3% qoq), while core net profit declined 3.1%. The weaker qoq profit was mainly owing to higher operating costs, especially natural latex and logistic-related expenses.
