KUALA LUMPUR: Wegmans Holdings Bhd (WHB) net profit increased by 370 per cent to RM4.75 million during the fourth quarter (Q4) financial year ended 31 December 2020 (FY20) compared to last year same quarter.
The positive increase in its bottomline was driven by the higher revenue generated during the period.
The group's net profit would have been higher if not for the non-cash deferred tax expense of RM0.84 million during the quarter.
WHB is principally involved in design, manufacture and sale of home furniture products.
During the 4Q FY20, the group saw its revenue increased by 75.5 per cent year-on-year (yoy) to RM41.1 million as compared to RM23.4 million same quarter last year.
The higher revenue was attributed to the higher sales volume from North America.
For the full year in FY20, WHB' revenue hit a record high of RM107.5 million, an increase of 26 per cent as compared to RM85.4 million in FY19.
Net profit was up by 10.3 per cent yoy to RM8.76 million as compared to RM7.94 million in FY19.
The improvement in net profit is in line with the higher revenue in FY20.
The overall earnings growth in FY20 would have been higher if not for the impact of the Covid-19 movement restrictions during the first half (1H) of the FY2o.
Executive director Collin Law Kok Lim said the company have seen a strong recovery in its business operations in the 2H FY20, led by the strong growth in key export market in North America.
"Going into FY21, we expect another challenging year amidst the lingering impact of Covid-19 pandemic.
"We are however optimistic to maintain our momentum growth as the group has taken advantage of the window opportunity to expand its capacity after winning some new key client in the United States," he said in a statement today.
The new key client is one of the largest retailers in the world and is renowned for its choice and prime beef, organic foods and wine.
It is also ranked among the largest US corporations by total revenue on Forbes 500.
It is noteworthy that the group's exports to North America has jumped by 1.7 times to RM31.93 million in 4Q FY20 from RM11.99 million in 4Q FY19.
For the full year in FY20, exports to North America contributed about RM71.62 million, which is 87.8 per cent higher RM38.14 million recorded in FY19.
Law is confident that the group will reap its rewards from the investment poured into capacity expansion as well as the proactive measures taken by the marketing team to gain new clients.
WHB has installed new machineries in its new factory in Johor to increase automation in its efforts to reduce reliance on foreign labour.
An additional RM20 million has been earmarked for its expansion plan, which includes construction of two new factories for manufacturing production, finishing line and automation machineries mainly for clients from the US.