Beverage maker Power Root Berhad (Power Root) reported a 33.8% dip in profit after tax (PAT) at RM10.5 million in the second quarter ended 30 September 2023 (2Q24) from RM15.8 million a year ago, in line with the decline in revenue by 20.7% to RM99.7 million.
In a statement today (Nov 22), the group said the slump in financial performance was due to weaker consumer sentiment in the region.
Local sales fell 22.7% to RM57.9 million from RM74.9 million previously, impacted by the shift in consumer purchasing behaviour and heightened sales in 2Q23 attributed to company’s strong growth from the reopening of Malaysia.
“On the other hand, overseas sales witnessed a declined by 17.8% to RM41.8 million from RM50.8 million a year ago, mainly due to the implementation of sales and distribution restructuring within the Middle East North Africa (Mena) business.
Its co-chairman Tengku Datuk Setia Putra Alhaj Azman Shah Alhaj said during the quarter, its local business faced a downturn in sales.
“(This can be) attributed to a combination of waning consumer sentiment and mounting concerns about inflation. Additionally, our overseas performance took a hit as we underwent sales and distribution restructuring within our Mena business.
“However, we persist in fortifying our market position through heightened advertising and marketing endeavors,” he said.
He added, the group remain committed to expanding and enhancing our strategically positioned portfolio of brands and products.
“Our unwavering focus on revenue management and cost optimization initiatives ensures a vigilant approach to sustaining growth.
“Looking ahead, we maintain an optimistic outlook, anticipating an improvement in financial performance as demand and supply mechanisms realign in the near term. Our confidence remains steadfast as we navigate through the challenges of the current business environment.”
The group’s six months ended 30 September 2023 (1H24) recorded a 10.8% reduction in revenue at RM212.1 million from RM237.8 million a year ago.
Local sales decreased by 12.8% to RM119.8 million from RM137.3 million, while oversea sales decreased by 8.1% to RM92.3 million from RM100.5 million previously.
Overall, the Group’s profit after tax for 1H24 stood at RM26.0 million, down from RM31.2 million in the previous year.
