Demand from overseas markets a boost for LSK

PETALING JAYA: Lee Swee Kiat Group Bhd (LSK) anticipates factors like the recovery of demand from overseas markets, fluctuations in key raw material prices and the performance of the Cuckoo Napure mattress collaboration to impact its performance in the financial year 2024 (FY24).

For the fourth quarter ended Dec 31, 2023 (4Q23), the mattress manufacturing firm’s net profit rose by 156.3% to RM4.1mil, translating to earnings per share of 2.55 sen.

On the other hand, revenue declined by 3.4% year-on-year (y-o-y) to RM34.2mil.

For the financial year ended Dec 31, 2023, the group’s net profit saw a 26.9% y-o-y increase to RM13.7mil, while revenue registered a 1.02% y-o-y drop to RM127.7mil.

Nevertheless, LSK proposed an interim dividend of 3.5 sen per ordinary share, totalling around RM5.65mil for FY23. Additionally, the board also proposed a special interim share dividend by distributing treasury shares on a basis of one for every 25 ordinary shares.

In a recent statement, LSK said the financial performance of the company was influenced by market conditions, operating activities and revenue, costs and profit margin dynamics.

“While domestic revenue experienced a slight decline in 4Q23, there was a notable recovery in demand towards the end of the quarter. The export division witnessed a modest increase in sales.

“The group maintained satisfactory operating levels, particularly in the mattress division for the domestic market. Sales in the latex division for the export market rebounded due to continued marketing efforts,” it said.

LSK managing director Datuk Eric Lee said the resurgence of demand from overseas markets, previously subdued for the past two years, now presents opportunities. He added the company is ready to capitalise on the positive momentum that is seen in the recent uptick in export sales over the past two quarters, accompanied by orders from new customers.

“Furthermore, while we navigate the fluctuations in key raw material prices, notably the centrifuged latex, we are poised to leverage these challenges as catalysts for innovation and operational optimisation.

“Our collaboration with the Cuckoo Napure mattress division, constituting approximately 20% of our total revenue, offers a robust platform for growth, particularly as we capitalise on the thriving demand through the expansive Cuckoo distribution network,” he said.

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