Jasa Kita: We can break even in FY17
> Company expects Devon brand electric power handtools to drive sales
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.