Southern Cable Group Bhd achieved a pre-tax profit of RM3.481 million on the back of a turnover of RM185.141 million for the first quarter ended March 31, 2022 from a pre-tax profit of RM4.813 million on the back of a turnover of RM172.288 million previously.
In a Bursa filing, it said that in the current quarter ended 31 March 2022, the Group recorded revenue of RM185.14 million compared with RM172.29 million for the previous corresponding quarter ended 31 March 2021, an increase of RM12.85 million or 7.46%.
Geographically, It said that the Malaysian market remained the largest market contributing to the Group’s revenue, accounting for approximately 96.10% of the total revenue for the current quarter ended 31 March 2022.
It said that The power cables and wires segment accounted for RM161.11 million or 87.02% of the group’s total revenue for the current quarter, an increase of RM6.07 million or 3.92% from RM155.04 million in the previous corresponding quarter.
It said that 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 RM24.03 million 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.
Overall, revenue from these segments increased by RM6.78 million or 39.33% from RM17.24 million in the previous corresponding quarter, mainly attributed by higher sales of aluminium and copper rods. The increase was partially offset by a decline in revenue
The Group recognised profit before tax of RM3.48 million in the current quarter compared with RM4.81 million in the previous corresponding quarter, a decrease of RM1.33 million or 27.65%. This was mainly due to product mix, higher administrative expenses and finance costs.
Additionally, the Group’s orders in hand (comprising unbilled purchase orders and outstanding order book) stood at RM628.57 million as at 31 March 2022. This includes a RM13.0 million contract secured on 31 March 2022 to supply copper telephone cables. Overall, the Group’s orders in hand are expected to provide financial visibility for the next 2 years.
To address the volatility of raw material costs, Southern Cable said that it will continue to assess and adjust pricing for its new contracts. Additionally, the Group is also actively participating in new tenders to support the local power infrastructure. At the same time, the Group will continue to enhance manufacturing efficiency by improving daily production output.
In a statement, Southern Cable Managing Director Mr. 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.”
