Higher sales from home appliances boosts Panasonic Malaysia in 1QFY18
KUALA LUMPUR: Panasonic Manufacturing Malaysia Bhd ’s earnings for the first quarter of its financial year 2018 (1QFY18) rose 3.3 per cent year on year (y-o-y) to RM39.6 million.
This accounted for 27.2 per cent and 27.4 per cent of MIDF Amanah Investment Bank Bhd (MIDF Research) and consensus full year earnings forecast respectively.
This was within expectation as in the past years, where 1Q results is normally a strong quarter.
“The group’s 1QFY18 revenue increased by 10.1 per cent y-o-y to RM327.8 million mainly impacted by a stronger home appliance segment,” it added. “Despite the increased in revenue, earnings increased modestly at 3.3 per cent y-o-y as operating margin contracted by 0.3 percentage points y-o-y to 15.4 per cent.
“In addition, losses from the associated company contributed to the lower earnings in comparison to the profit of RM3 million recorded in the corresponding quarter.”
Notably, Panasonic’s home appliances products’ revenue grew by 11.4 per cent y-o-y mainly contributed by the increased in export sales to Vietnam and the Middle Eastern regions.
“Vietnam’s market has seen good growth potential with its increasing purchasing power while the improvement in the economic environment contributed to the higher sales in the Middle East region,” MIDF Research added.
The profit before tax (PBT) increased by 11.2 per cent y-o-y to RM19.8 million. The higher profitability in the current quarter was mainly due to increase in revenue and absence of development and tooling costs that was incurred in the previous year’s corresponding quarter with the introduction of new range of rice cooker products last year, it said.
MIDF Research saw that Panasonic’s fan and other products’ performance dropped marginally.
“The fan and other products’ revenue grew by 9.1 per cent yo-y. The improvement in sales was mainly seen in ceiling fans products attributable to sales recovery from United Arab Emirates.
“Nevertheless, due to tighter margins, the fan and other products’ segment achieved a profit before tax of RM29.7 million, which was marginally lower by 0.3 per cent y-o-y.
“The lower earnings is attributable to the rising costs of raw materials as well as higher operation expenses.”
Despite some signs of recovery in earnings driven by export sales, MIDF Research expect Panasonic’s 2Q’s performance will be slightly modest as the political tensions in the Gulf could cloud the economic outlook in the Middle East region and may affect the company’s export revenue.
“Also, domestically the Company’s operations remain affected by the ongoing tight labour market, rising raw materials prices and volatile foreign currency exchange rates and rising household debts.
“Nevertheless the Company remains steadfast in its continued efforts to reduce overall production costs, increase productivity and strive to deliver satisfactory results for the current financial year.”