Atlan hit by higher material costs, forex losses

Net profit for third quarter down 90% to RM1.61mil

PETALING JAYA: Atlan Holdings Bhd’s net profit for its third quarter ended Nov 30, 2017 plunged 90% to RM1.61mil from RM16.68mil in the previous corresponding period.

The company’s results were weighed down by a weaker performance across all business segments due to higher material costs and foreign exchange (forex) net losses.

In a filing with Bursa Malaysia, Atlan said its third-quarter revenue, however, had increased marginally to RM186.07mil from RM181.62mil a year earlier.

Atlan has businesses ranging from the retailing of duty-free goods and property investment to automotive manufacturing and hospitality.

It has declared a third interim single-tier dividend of 10 sen per share for the financial year ending Feb 28, 2018 (FY18), to be paid on March 15.

For its nine-month period, the company’s net profit dropped to RM22.68mil from RM41.94mil in the previous corresponding period, while revenue dipped to RM602.73mil from RM613.02mil a year earlier.

On its automotive segment, Atlan said a lower profit was registered in the current quarter and cumulative quarter as compared to the previous corresponding and cumulative quarter, despite a higher recorded revenue.

“The unfavourable results were mainly due to the higher material costs and maintenance expenses incurred.

“In the property and hospitality segment, the profit for the current quarter and cumulative quarter was comparable to the previous corresponding and cumulative quarter.”

Atlan said its investment holding segment reported a loss in the current quarter and cumulative quarter, as compared to the pre-tax profit recorded in the previous corresponding and cumulative quarter.

The company said the unfavourable results for the current quarter were mainly due to a net loss in forex amounting to RM7.3mil compared to a net gain in forex amounting to RM9.5mil in the previous corresponding quarter.

“As for the cumulative quarter, the ringgit had rebounded against the Singapore dollar by about 3.8% from RM3.15 as at Feb 28, 2017 to RM3.03 as at Nov 30, 2017; and the dollar by about 7.9% from RM4.44 as at Feb 28, 2017 to RM4.09 as at Nov 30, 2017.

“This has resulted in a net loss in forex amounting to RM12.9mil in the current cumulative quarter compared to a net gain in forex of RM11mil in the previous corresponding cumulative quarter,” it said.

“In the other segment, the losses in the current quarter and cumulative quarter were lower than the previous corresponding and cumulative quarter, mainly due to lower operating expenses.”

On its outlook, Atlan said it would continue with its efforts to strengthen operational efficiencies and cost-control measures to remain competitive and profitable in the remaining quarter of FY18.

“In view of the prevailing economic conditions, with the volatile ringgit against the dollar coupled with the competitive business environment, the industries in which the group operates is expected to remain challenging.”

In view of the prevailing economic conditions ... the industries in which the group operates is expected to remain challenging. Atlan Holdings Bhd