Tek Seng inches into the black with RM10.41m profit, boosted by solar sales

by **Cals** Mon 15 Feb 2016, 19:51

Tek Seng inches into the black with RM10.41m profit, boosted by solar sales

By Danial Idraki / theedgemarkets.com | February 15, 2016 : 6:50 PM MYT

KUALA LUMPUR (Feb 15): Tek Seng Holdings Bhd continued to benefit from its diversification into the solar cell making during the fourth quarter of the year ended Dec 31, 2015 (4QFY15), recording a net profit of RM10.41 million or 4.02 sen per share, compared to a net loss of 513,000 or 0.21 sen per share a year ago.
This comes after the company, whose traditional activity is PVC products manufacturing, reported a near threefold jump in net profit for 3QFY15, on higher revenue that came primarily from the solar segment.
In a statement today to Bursa Malaysia, Tek Seng said 4QFY15 revenue also saw a significant rise of 2.5 times to RM122.36 million, from RM49 million in the previous corresponding period, with contribution from the solar segment accounting for 67.9%.
Profit before tax for the solar segment in 4QFY15 increased to RM11.5 million, due to higher sales volume, it said.
Its sheeting business segment PBT increased to RM3.7 million, while its PP non-woven, PVC leather and other businesses collectively made up a PBT of RM1.22 million, according to the group’s filing.
For the full FY15, Tek Seng posted a net profit of RM21.27 million or 8.51 sen per share, a 76.1% jump over the RM12.08 or 5.03 sen per share reported a year ago. Revenue came in 54.9% higher at RM359.52 million, from RM232.11 million in FY14.
Moving forward, Tek Seng expects its performance for 2016 to remain stable for its PVC business, but concedes the business may be affected by the fluctuation in the price of raw materials, as a result of market uncertainty and the weakening ringgit.
The solar division, namely TS Solartech Sdn Bhd, on the other hand is contributing “significantly” to its revenue and profit, it added.
“The group will be taking a cautious approach to mitigate the exposure by improving its operational efficiency, product quality and innovation as a positive step forward, [in order] to sustain the business growth and success,” it added.
Tek Seng closed 2.75% or 3 sen higher at RM1.12 today, with 1.35 million shares traded, giving it a market capitalisation of RM298.84 million.