SYF Resources' 4Q net profit doubles on property development contribution

by **Cals** Sun 27 Sep 2015, 17:28

SYF Resources' 4Q net profit doubles on property development contribution

By Danial Idraki / theedgemarkets.com | September 25, 2015 : 8:40 PM MYT

KUALA LUMPUR (Sept 25): [size=16]SYF Resources Bhd ([You must be registered and logged in to see this image.] Valuation: 1.50, Fundamental: 0.80)'s net profit for the fourth quarter ended July 31, 2015 (4QFY15) almost doubled to RM10.13 million or 1.66 sen per share from RM5.27 million or 1.92 sen per share a year ago, primarily due to contribution from its property development segment.

The group's revenue for the period was up 79.9% to RM114.9 million from RM63.86 million in 4QFY14, as the group saw significant revenue rise in the property development segment as construction progressed and more deals closed.

Higher board sales as production capacity improves, as well as higher rubber wood furniture exports due to a stronger US dollar, also contributed to the better top line.

SYF's net profit for the full FY15 came in at RM24.94 million or 5.01 sen per share, 14.9% higher from RM21.7 million or 7.93 sen per share in the preceding year.

Revenue for the period also increased 14.1% to RM316.24 million from RM277.13 million in FY14.

In a filing with Bursa Malaysia today, the group foresees challenging operating conditions for the financial year 2016, on the back of a gradual improvement in the US economy.

"The continued strengthening of the US dollar against the ringgit does not really benefit furniture exports any further, as price adjustments have to be made to reflect the currency exchange movement," the group said in the filing.

The group further noted that demand in the property development segment has been affected by local economic concerns as well as continued stringency in loan approvals.

"Although the property division will have to contend with overall softer demand and stringent end-financing eligibility requirements, the group's existing ongoing projects in Sungai Long and Semenyih are strategically located and expected to achieve satisfactory sales," the group added.

The group's manufacturing segment, however, is expected to improve further with more contribution coming from the board's division, once additional capacity comes on-stream during the first half of FY16.

SYF's shares closed 0.5 sen higher at 44.5 sen, with 1.32 million shares traded, giving the group a market capitalisation of RM269 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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