Southern Cable 1Q net profit falls 27% to RM2.6mil

KUALA LUMPUR: Southern Cable Group Bhd’s net profit fell 27.7% to RM2.61mil in the first quarter ended March 31, compared with RM3.61mil a year ago due to product mix, higher administrative expenses and finance costs

The cable and wire manufacturer reported a 7.5% revenue growth to RM185.1mil in the first quarter from RM172.3mil last year, as it benefited from adjusted selling prices in line with higher commodity prices.

Geographically, the Malaysian market remained the largest market contributing to the group’s revenue, accounting for approximately 96.10% of the total revenue in the first quarter.

The power cables and wires segment accounted for RM161.11mil or 87.02% of the group’s total revenue for the current quarter, an increase of RM6.07mil or 3.92% from RM155.04mil in the previous corresponding quarter.

The revenue growth is attributed to the higher average selling prices of cables and wires, in line with the price increase of metal-based materials such as copper and aluminium, and non-metal based materials including plastic and sawn timber.

The balance RM24.03mil or 12.98% of total group revenue was derived from the communication cables and wires segment, control and instrumentation cables and wires segment, and others.

In a statement, it said the industry had faced increasing international prices of metal-based materials such as copper and aluminium, and non-metal-based materials including plastic and sawn timber since early-2021.

This prompted Southern Cable to increase product prices to mitigate higher input costs.

Managing director Tung Eng Hai said that the group aimed to strike a balance between adapting its pricing strategy while remaining competitive, especially as demand for cables and wires were anticipated to trend upwards on Malaysia’s recovering economic and business activities.

“As a player with a track record in key sectors including power, telecommunications, and infrastructure, we are poised to support the accelerated economic activity, especially following the country’s transition to Covid-19 endemicity.

“We are also actively participating in new tenders to support the local power infrastructure. These would add on to our orders in hand of RM628.6mil which are slated to be fulfilled over two years,” he said.

The group’s RM628.6mil orders in hand comprise RM385.8mil unbilled purchase orders, and RM242.8mil order book. The latter includes an RM13mil contract secured on March 31 to supply copper telephone cables to a local telecommunications company.

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