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For the current quarter, the Group reported a profit before tax of RM1.45 million on the back of RM14.95 million in revenue as compared to a profit before tax of RM2.71 million and revenue of RM15.01 million in the preceding year comparative quarter.
The bedding operation in Malaysia recorded lower profit before tax as a result of declined revenue and gross profit margin which was affected by higher raw material costs. The stainless steel fittings operationâ€™s reduced loss before tax was attributable to better average selling price. Loss in associates in China was mainly due to impairment loss on plant and equipment in the power business.
For the current financial year ended 30 June 2017, the Group achieved a higher profit before tax of RM13.41 million compared with RM8.54 million in the preceding financial year. Revenue rose by 8% to RM55.79 million.
The bedding operation in Malaysia reported lower profit before tax for the year albeit a 5% increase in revenue. Its gross profit margin was adversely affected by increased raw material costs in the second half of the financial year. The stainless steel fittings operation posted a lower loss before tax due to improved selling price and gross profit margin. Lower profit contribution from associates in China mainly due to second quarterâ€™s losses and impairment loss on plant and equipment in the power business. Higher other income was primarily due to incentives received by the associates in Jiangyin and gain on deregistration of a subsidiary in Hong Kong.
According to World Bank, Malaysian economy is expected to grow by 4.9 percent at the end of 2017, with private consumption as the main growth engine. There are uncertainties about global policies on trade and interest rates, which post potential risks.
The bedding operation will continue to build on â€śDreamlandâ€ť and â€śChiroâ€ť brands. Marketing strategy and products will be enhanced to improve sales and performance. More effective and timely cost management will be put in place to improve profitability.