Ogawa sees 37% jump in net profit


  • Business
  • Thursday, 29 Mar 2007

KUALA LUMPUR: Main board-bound Ogawa World Bhd expects a 37% rise in net profit for financial year 2007 on strong contribution from the high growth markets of Vietnam and China along with steady expansion in the domestic health and wellness market. 

Net profit for financial year (FY) ended June 30, 2007 is expected to jump to RM16mil from RM11.7mil in FY2006. Revenue is also expected to grow 19% to RM162.4mil for FY2007. 

Speaking at the launch of the company’s prospectus yesterday, executive director Louis Chong said: “With growing affluence, rising disposable income and an increasingly health conscious society, we are optimistic on the prospects of the health and wellness industry.” 

The company expected a 20% growth in the sector regionally for calendar year 2007, Chong said. 

Ogawa is targeting revenue contribution from its overseas operations to double to 40% in the next three years. In the shorter-term, overseas sales were expected to account for 25% of total revenue for FY2007 from 20% in 2006, Chong said. 

The company is aiming to open 11 new outlets, mainly in China and Vietnam, to achieve a total 160 outlets by June 2007. 

From left: Executive chairman Richard Wong, Public Investment Bank CEO Teoh Cheng Soon and Louis Chong

Of its 149 outlets, 114 come directly under the group and are located in Malaysia, Singapore, China and Hong Kong. The balance 35 are operated through exclusive distributorships in Indonesia, Australia and Vietnam. 

Ogawa plans to open its first outlet in the Middle East - in Dubai - by year-end. It is also exploring the market in India and Thailand. 

Scheduled for listing in April, Ogawa is offering 17.2 million new 50 sen shares, of which six million will be allocated for the public at an issue price of RM1 each.  

It is also offering 36 million shares to approved bumiputra investors. 

The exercise is expected to raise RM31.9mil, of which RM15mil has been earmarked for land and building acquisition within 24 months. 

“We are looking at somewhere nearer to port, maybe in Kota Kemuning (Shah Alam),” Chong said, adding that the move was expected to double Ogawa’s warehousing space to two acres. 

The company also plans to use RM1.2mil to double its fleet of delivery trucks to 40 within two years. 

“We are aiming to cut delivery time to three days from seven days currently,” Chong said. 

 


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