PETALING JAYA: Spritzer Bhd
, which reported two consecutive quarters of earnings growth, is in a good position to chalk up higher earnings in the near term owing to greater domestic travel and international tourist arrivals.
Malacca Securities in its latest report said that going forward, global tourism is expected to improve gradually to pre-Covid-19 pandemic levels, which would benefit the well-established Spritzer bottled water in tandem with the increase in tourism activities. Tourism Malaysia had reported a 160% year-on-year (y-o-y) increase in the first nine months of last year.
In the third quarter of 2023, the bottler achieved a net profit of RM17mil compared with RM11.4mil previously, an increase of 48.5% y-o-y, on the back of a stronger revenue of RM132.6mil from RM119.6mil in the same period a year ago, a surge of 10.8% y-o-y.Spritzer produces natural mineral water, carbonated flavoured water, distilled water and drinking water. It also manufactures and sells polyethylene terephthalate (PET) bottles, tooth brushes and plastics household goods.
The research house said it also expects stronger net profit margins from normalising raw material prices.
“The year-to-date prices for PET resin has dropped and remains at a lower level. Hence, normalising prices going forward on PET resin is expected to reduce the raw material costs for bottled water and it should improve net profit margins.”
It said the share price of the company has been consolidating sideways around RM2.17 and experienced a breakout closing at RM2.23, pending another breakout.
