Jasa Kita: We can break even in FY17

> Com­pany ex­pects Devon brand elec­tric power hand­tools to drive sales

The Sun (Malaysia) - - SUNBIZ - BY EVA YEONG

KUALA LUMPUR: Jasa Kita Bhd, which suf­fered a net loss of RM705,000 for its fi­nan­cial year ended March 31, 2016 (FY16), is con­fi­dent of break­ing even in FY17 driven by con­tri­bu­tion from the Devon brand elec­tric power hand­tools.

Ex­ec­u­tive direc­tor Ong Bing Yap said the com­pany started dis­tribut­ing Devon prod­ucts in July this year and hopes to re­place the loss of sales from Makita prod­ucts.

Devon prod­ucts are man­u­fac­tured by Cher­von (China) Tools Sales Co. Ltd. from China and Jasa Kita has ex­clu­sive dis­tri­bu­tion rights for Devon in Malaysia.

“We launched the tools in July this year but we had been ne­go­ti­at­ing with them about half a year ago. The qual­ity is su­perb; if it is not bet­ter than Makita, it is at least equal. For the first two months, we have gar­nered some sales,” he told re­porters af­ter its AGM yes­ter­day.

He said Devon prod­ucts will con­trib­ute about 20% to its to­tal rev­enue dur­ing the first two years and will grow to at least 30% af­ter that. The com­pany also be­gan dis­tribut­ing au­to­mo­bile bat­ter­ies bear­ing GP brands in June this year. It is tar­get­ing a sales turnover of RM8 mil­lion worth of bat­ter­ies for FY17.

Ong said it is also in talks to dis­trib­ute more brands in the power tools seg­ment but de­clined to re­veal fur­ther details.

In FY16, the com­pany’s rev­enue fell to RM43.47 mil­lion from RM64.52 mil­lion a year ago due to a 43% drop in the sales of elec­tric power tools.

The drop in sales, cou­pled with higher prod­uct costs due to the weak­ened ring­git, re­sulted in a net loss of RM705,000 com­pared with a net profit of RM5.05 mil­lion a year ago.

Makita Power Tools (Malaysia) Sdn Bhd, the prin­ci­pal of Makita prod­ucts, ap­pointed ad­di­tional dis­trib­u­tors last year, which re­sulted in height­ened com­pe­ti­tion.

“Power tools will con­tinue to be the big­gest con­trib­u­tor for the next two to three years. We also be­lieve that the mar­ket for (au­to­mo­bile) bat­tery is big, so maybe rev­enue from this prod­uct will catch up with elec­tric hand tools,” said Ong. It cur­rently con­trib­utes over 60% to rev­enue while elec­tric mo­tors and hand tools con­trib­ute 10-15% each. The re­main­ing 6-7% rev­enue comes from the ware­hous­ing busi­ness.

For the first quar­ter ended June 30, 2016, the com­pany posted a net profit of RM143,000 and rev­enue of RM10.86 mil­lion.

“Within our en­vi­ron­ment, we will be fo­cus­ing on our busi­ness. We are quite op­ti­mistic of break­ing even, where we achieve our tar­geted re­sults for the com­ing year. For future de­vel­op­ments, we are con­stantly look­ing out for it.

“We may have to do things out­side the box. For ex­am­ple, we are in­volved in in­dus­trial prod­ucts, so maybe we will do some­thing with non-in­dus­trial prod­ucts,” he said.

Ex­ec­u­tive chair­man Tan Sri Robert Tan Hua Choon said the com­pany has two plots of land mea­sur­ing 3.5 acres each in Kuala Lumpur and is mulling the idea of de­vel­op­ing the land.

How­ever, he said its plans are still in the early stage.

The com­pany cur­rently has a fac­tory on the land in Batu Caves while the land in Se­ta­pak is va­cant. The com­pany ac­quired the land in 1993 and 1994 re­spec­tively.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.