KUCHING: CCK Consolidated Holdings Bhd group has more than doubled its net profit to RM11.6 million in second quarter to June 2022 (Q22022) from RM5.36 million in Q22021, brought about by strong sales on continued recovery of consumer demand.
Group turnover surged to RM210 million from RM166.9 million previously. Earnings per share were lifted to 0.85 sen from 0.86 sen.
CCK said its group revenue rose by 26.6 per cent to a record RM210 million, attributing the significant growth to continued recovery in consumer demand, leading to a markedly improved performance in the poultry and retail segments.
It said the group’s food service segment also benefitted from the re-opening of schools in Sarawak and contributed to the overall group revenue.
In Q22022, the retail segment was the main revenue contributor of RM172 million, followed by the poultry segment (RM27.5 million) prawn segment (RM5.29 million) and food service segment (RM5.11 million).
The retail segment posted pre-tax profit of RM14.4 million, food service segment (RM605,000), prawn segment (RM162,000). The poultry segment incurred pre-tax loss of RM772,000.
“The retail segment grew 24.4 per cent during the quarter, partly due to more matured contributions from three CCKLocal supermarkets (in Kuching, Kota Kinabalu and Sibu) and four CCK Fresh Mart retail stores that came on stream in the previous few quarters.
“Additionally, an overall recovery in consumer demand coupled with the re-opening of food and beverage outlets, which drove wholesale volumes, also boosted the performance of the retail segment,” CCK said in notes accompanying its financial results.
The group currently has 63 Fresh Mart retail stores, three supermarkets and six wholesale stores in Malaysia.
On the performance of its Indonesian operations, CCK said its revenue rose to RM36.3 million in the current quarter from RM34.2 million in Q22021 as demand for the group’s in-house manufactured processed products remained robust despite a seasonally festivity-induced low production quarter.
“Demand for poultry products recovered due to the re-opening of food and beverage outlets, demand from institutional clients and improved consumer sentiment. This led to a 19.6 per cent increase in total segment revenue for Q22022. Poultry sales via our own retail stores (intersegment sales) continued to be robust, tracking the performance of the retail segment.
“The prawn segment’s revenue remained largely unchanged for Q22022. Export volumes continued to gain momentum whilst domestic sales via our own retail channels decreased due to lower production volume. Ongoing efforts to acquire new customers bore fruit as the segment benefitted from higher exports to South Korea and Australia, which offset the weaker demand from Japan.
“The food service segment reported a revenue of RM5.1 million in Q22022, significantly higher than RM1.9 million in Q22021. This was due to the reopening of government schools in Sarawak,” added the company.
In the current quarter under review, CCK said the group pre-tax profit jumped 115.1 per cent to RM14.9 million largely due to the outperformance of the retail segment and a reduction in losses of the poultry segment to RM0.77 million from RM1.6 million in Q22021. Overall gross profit margins inched up to 19.5 per cent from 19.0 per cent previously.
However, the company said despite the significant recovery in overall profitability, elevated feed prices and weakness in the ringgit continued to have an adverse impact on margins.
CCK said the retail segment saw its pre-tax profit expanded by 97.3 per cent to RM14.4 million in Q22022 from a year ago due to strong sales.
The Q22022 financial results improved slightly as compared to Q12022 when CCK registered group net profit of RM11.1 million (Q22022: RM11.6 million) on revenue of RM197.4 million (RM210 million) .
During the January-June 2022 period (6M2022), CCK group net profit soared to RM22.75 million (6M2021: RM11.43 million) as revenue surged to RM407.4 million (RM330.6 million).
Commenting on future prospects, CCK said: “Vaccination rates in Sarawak (against COVID-19) have now exceeded 90 per cent of the eligible adult population, with most having received their third dose. This is expected to have a positive effect on consumer sentiment as movements restrictions are eased, dining out resumes and schools are re-opened. This is likely to benefit the food and beverage industry.
“In addition, Sarawak has moved to phase four of the National Recovery Plan. This will allow public and private sector workplaces to operate at 100 per cent capacity.”
However, the company cautions that a resurgence of the high daily number of positive COVID-19 cases in Sarawak could see the reimposition of movement control and restrictions on dining out. If that happened, this would negatively affect business and dampen consumer sentiments.
CCK said the continued strengthening of the US dollar and fluctuations in the prices of corn and soy continues to be a cause of concern as this will affect the cost structures of both the group’s retail and poultry segments.
The company said its board of directors is cautiously optimistic with regard to the performance of the group in the coming quarters.
