30 Jan 2023 PGF Capital Q3 results buoyed by insulation segment’s contribution
PETALING JAYA: PGF Capital Bhd’s net profit for its third quarter ended Nov 30, 2022 (Q3’22) surged to RM2.03 million compared with RM39,000 in the previous year’s corresponding quarter, due mainly to higher production and increased sales revenue from its insulation segment.
Revenue increased 31.27% to RM17.75 million compared with RM13.52 million in the previous corresponding quarter.
For the nine-month period, net profit rose to RM11.16 million from RM1.05 million. Its revenue increased by 62.27% to RM66.14 million from RM40.76 million.
The group said that its insulation segment continued to be the largest contributor to its topline, with RM17.36 million in Q3’22 which translated to about 98% of its total revenue, reflecting an increase of RM4.17 million or 32% compared with the corresponding period of the previous year.
PGF remarked that its production increased in Q3’22 with sales delivery on schedule. It achieved higher production which resulted in the increase of sales delivery and sales revenue, which in turn boosted its net profit.
Executive chairman Fong Wern Sheng (pic) said that in line with the group’s plan to increase its market share in the Oceania region, it has secured leases of multiple warehouses in strategic locations across major cities in Australia through wholly owned subsidiary PGF Insulation Pty Ltd, which was incorporated in Australia in May last year.
“We have set up our regional HQ in Melbourne, Australia, which enabled the group to be in closer proximity to the Oceania market, increasing our ability to provide localised solutions and offer a wider range of products to the market. As such, we are cautiously optimistic about our future in the Oceania region.
“We also believe demand from this region will continue to be strong due to revisions in the National Construction Code in Australia and the Building Code in New Zealand, which require more insulation to achieve higher energy efficiency ratings for their buildings. This bodes well for PGF’s expansion plans in the region,” he said in a statement today.
On prospects, the group said that insulation and related products segment will continue to drive the company’s profit. Although the inflationary pressure on raw material has eased, the removal of electricity subsidy by the Malaysian government for industrial customers and the increase of natural gas price have put significant pressure on production costs.
The group continues to be cautiously optimistic that the insulation business will have a stable performance in the current financial year. For the agriculture segment, it said that durian trees are continuously being replanted from the nursery to the designated orchard land. Cash crops such as kumquat and passion fruit have been planted to generate cash flow for Diamond Creeks Ecofarm Sdn Bhd.
Barring any unforeseen circumstances, the group said that the cash crops are expected to be harvested latest by the first quarter of the financial year in 2024, which will contribute to the sales revenue of this segment. As for the other segments, it will continuously seek out new business opportunities that will add value to the shareholders by investing in property development, ecotourism, agriculture and aquaculture to unlock the value of the land held.