Elk-Desa Resources rides on recovery trend, posts RM17.59mil net profit in 1Q

KUALA LUMPUR: Bolstered by a positive performance in the first quarter of its financial year, Elk-Desa Resources Bhd plans to leverage on the recovery of the domestic economy to bring its hire purchase receivables portfolio to pre-pandemic levels.

“Moving forward, the domestic economy is expected to remain on a recovery trend, supported by the continued expansion in global demand and higher private sector expenditure given improving labour market conditions and on-going policy support,” said Elk-Desa Resources executive director and chief financial officer Teoh Seng Hee in a statement.

However, he noted that macro-economic uncertainties remain, including concerns related to higher cost of living that may impact current and potential hirers.

In the first financial quarter ended June 30, 2022, Elk-Desa recorded a net profit of RM17.59mil, which was about 3.5 times RM4.97mil in the previous comparative quarter.

Earnings per share picked up to 5.83 sen from 1.67 sen in the same quarter last year.

The group reported revenue of RM38.96mil, as compared with RM31.37mil in the comparative quarter on higher contribution from both hire-purchase and furniture segments.

According to Teoh, hire-purchase revenue rose 7% to RM24.52mil, reflecting an expansion in the portfolio.

The segment also saw a reversal of impairment allowance of RM5.36mil compared to an impairment allowance of RM8.22mil in the same period last year.

Net impaired loans ratio decreased from 2.89% as at March 31, 2022, to 1.83% as at June 30, 2022.

There was also a reversal of credit loss charge of 0.98% compared to a credit loss charge of 1.43% in the last corresponding quarter.

Meanwhile, the furniture segment's revenue jumped 70% to RM14.44mil on higher sales, due to the absence of movement restrictions seen in the comparative quarter.

"Our positive performance was due to the better-than-expected decrease in non-performing accounts and exceptionally good collection trend.

"While this is facilitated by the normalisation of the national economy following the disruptions caused by the global health pandemic, we do not foresee such reversal of impairment to continue in the current year as uncertainties still persist within our operating environment,” said Teoh.

Article type: free
User access status:
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Next In Business News

Oil prices fall more than 1% as dollar scales new peak
China real estate shares, bonds slump on report of CIFI default
Etiqa, MIPFM sign MoU for exclusive professional indemnity insurance for property managers
Ageson unit enters MoU to sell 9.3-acre Gombak land ahead of proposed development
Scientex Packaging expansion plans remain on track
Betamek in talks with partners to develop innovative product solutions for auto market
Bursa joins Asian equities sell-off as recession risks grow
Maybank to fully migrate to Secure2U authentication for online transactions by June 2023
IHH sees upside potential now Fortis MTO hurdles resolved
Ringgit slides further against US dollar

Others Also Read