Rhone Ma Holdings (Rhone Ma) reported a higher quarter one 2023 revenue of RM48.5 million driven by higher contributions from the animal health and food ingredient businesses that more than offset lower revenue from the dairy / other businesses.
Notwithstanding the higher revenue, Rhone Ma’s quarter one 2023 earnings before interest, tax, depreciation and amortisation fell by
7.1% year-on-year to RM5.7 million due to the decrease in gross profit, as a result of higher material costs, said Affin Hwang Investment Bank (Affin) in a recent report.
Overall, Rhone Ma’s quarter one 2023 core net profit of RM3.4 million was within consensus and Affin’s expectations. The group’s quarter one 2023 core net profit accounted for 27.6% of our full-year earnings forecast, partly driven by the reversal on provision for trade receivables.
“We expect a normalisation in the provision for trade receivables and a further increase in cost pressure to soften its quarter two-quarter four 2023 earnings, vis-à-vis the quarter one 2023 performance,” said Affin.
Sequentially, Rhone Ma’s quarter one 2023 revenue fell by 9.6% quarter-on-quarter due to lower contribution from all segments; in particular, the dairy / other businesses reported a steep revenue decline of RM4.7 million to RM1.1 million.
Against a low base in quarter four 2022, Rhone Ma’s core net profit rebounded by 43% quarter-on-quarter on the back of a higher profit margin, driven by improved performance from the companion animals and livestock segments.
Also, the group reported a positive minority interest of RM0.2 million in quarter one 2023 due to losses from the dairy segment and lower profit from the ruminant segment.
