DKSH net profit down 14% due to higher operating costs

PETALING JAYA: DKSH Holdings (M) Bhd’s net profit fell 14.1% to RM14.05mil for its second quarter ended June 30 from RM16.36mil in the corresponding quarter last year on higher operating costs.

The consumer goods company said that during the quarter in review, revenue increased 3.5% to RM1.44bil from RM1.39bil previously, thanks to organic growth in existing clients.

Its earnings per share (EPS) fell to 8.91 sen from 10.37 sen previously. DKSH has proposed a first interim dividend of 10 sen per share.

For the cumulative period, the group’s net profit fell 5.8% to RM24.86mil for the six months to June 2018 from RM26.4mil previously.

The lower earnings were attributable to a change in product mix and a slight increase in cost base.

Its revenue grew 4.9% to RM2.9bil from RM2.76bil previously as a result of underlying organic growth in existing clients, primarily in the logistics segment. EPS fell to 15.77 sen from 16.75 sen previously.

DKSH said overall, the outlook for the company this year is neutral but it is positive for its logistics segment.

“Prospects for the marketing and distribution segment are less positive due to shortterm volatility relating to the introduction of the sales and service tax on Sept 1 and a oneoff negative impact from a specific client contract. The long-term outlook remains positive,” it said.

DKSH said two market trends would support a positive medium-to-long-term outlook for the group.

“Firstly, the growing middle class in Malaysia supports the demand for consumer goods and healthcare products.

“Secondly, manufacturers are increasingly focused on core competencies and seek specialised service providers in order to grow the market,” it said.