Spritzer's 3Q net profit up 14.76% to RM6.19m on lower tax expense

by **Cals** Fri 29 Apr 2016, 05:14

Spritzer's 3Q net profit up 14.76% to RM6.19m on lower tax expense

By Chester Tay / theedgemarkets.com | April 28, 2016 : 6:02 PM MYT

KUALA LUMPUR (April 28): Spritzer Bhd’s net profit for the third quarter ended Feb 29 (3QFY16) rose 14.76% to RM6.19 million, from RM5.39 million a year ago, due to lower income tax expense.

Earnings per share (EPS) rose to 4.21 sen, from 3.88 sen previously, the bottled mineral water manufacturer cum distributor told Bursa Malaysia in a filing today.

The group said its effective tax rate for 3QFY16 was lower than the statutory income tax rate, mainly due to the overprovision of deferred tax, and recognition of deferred tax assets on unutilised reinvestment allowance carried forward.

However, it registered a profit before tax of RM7.35 million for 3QFY16, which was 3.92% lower than the RM7.65 million posted in 3QFY15.

Spritzer explained this was mainly due to higher input costs and selling and distribution costs incurred for market exploration, product launches, as well as advertising and promotion.

Nevertheless, the group’s revenue for 3QFY16 grew by 13.92% to RM70.30 million, from RM61.71 million in the previous corresponding quarter.

For the nine months ended Feb 29 (9MFY16), Spritzer’s net profit rose by 34.56% to RM20.89 million, from RM15.53 million for 9MFY15. Revenue increased 11.35% to RM202.58 million, from RM181.94 million.

Moving forward, Spritzer said it is cautiously optimistic that the demand for bottled water will remain stable, amid the current economic headwinds and challenges.

“With our wide product range catering to the various market segments, our strong branding, the quality and health benefits of our silicon-rich Spritzer natural mineral water and our leading position in the bottled water industry, we will be able to sustain the demand of our various bottled water products,” it said.

Nonetheless, Spritzer noted the various fiscal reforms by the government and the depreciation of the domestic currency have also pushed up its costs.

“To achieve greater economies of scale and to improve our cost and production efficiencies, we will continue to expand and equip our plants with fully-automated and high capacity machines. We also have plans to grow our exports sales, which currently accounts for less than 10% of our revenue,” it said.

Therefore, Spritzer said it remains confident that the group will perform satisfactorily in FY16.

Spritzer shares rose one sen or 0.39% to RM2.58 today, giving it a market capitalisation of RM396.82 million.