Automotive upholstery maker Pecca Group Berhad reported 56% increase in net profit for the financial period ended September 30, 2023 (Q1 FY2024), at the back of higher sales of upholstery car seat cover and improved operational efficiency.
The group delivered a record quarterly net profit of RM13.01 million in the first quarter of fiscal 2024, as compared to RM8.35 million the previous year.
“Revenue also rose 17% year-on-year (YoY) to RM64.05 million, from RM54.86 million a year ago,” it said in a statement for the Q1 FY2024 results announcement.
In the first quarter of FY2024, the group’s revenue was driven by demand for leather upholstery and the sewing of fabric car seat covers, which contributed about 90% and 5% of the group’s total revenue, respectively.
The original equipment manufacturer (OEM) upholstery car seat segment contributed about 88% of the total revenue for car seat covers whilst the replacement equipment manufacturer (REM) and pre-delivery inspection (PDI) segments contributed about 3% and 9% in revenue respectively.
The group said its net profit margin for the quarter under review was 20.3%, a 34% increase from last year’s corresponding period.
“Pecca’s profitability improved due to reduced operating costs, as the Group’s production facilities reaped the benefits of better economies of scale,” it said.
Its chief executive officer Foo Ken Nee said the group is pleased to kick off FY2024 with another set of solid financial results, underscoring its commitment to achieving sustained business growth.
“This marks the fifth consecutive quarter where the group has set a new net profit record. As we continue to meet growing demand for high-quality automotive upholstery, our focus on operational efficiency has enabled us to reap rewards from economies of scale.
“We remain dedicated to maintaining this positive trajectory and delivering value to our stakeholders,” he said.
Pecca is also expanding its local and foreign customer base in the REM segment and penetrate new markets in the US, Australia, New Zealand, Singapore and Europe.
In FY2024, he said the group will continue its efforts to diversify into new markets.
“Our strong cash position, which has risen to RM112.60 million as of Q1 FY2024, will give us the firepower to catalyse our growth,” he added.
Executive director Teoh Zi Yi said the group believes aviation division can emerge as a key driver of revenue, as global air travel picks up.
“We have already achieved a key milestone in Q1, with our first purchase order from a European commercial aviation customer via our collaboration with Aero Cabin Solutions, our MRO partner from France.
“In addition, through our stake in PT Gemilang Maju Kencana, we have established a physical manufacturing presence in Indonesia, giving us a foothold in one of the region’s biggest car markets.
