KUALA LUMPUR: Rubberwood furniture manufacturer Sand Nisko Capital Bhd (SNC) return to profitability in the first quarter (Q1) ended 31 March 2021 (FY21) after two consecutive quarters of losses, led by the recovery in its manufacturing and trading business segment amidst the recovery of the global furniture industry.
According to the filing with Bursa Malaysia, SNC posted a net profit of RM2.3 million in the Q1 FY21 compared to a net loss of RM0.4 million in the same quarter a year ago.
The turnaround is mainly driven by the manufacturing and trading business segment, which has recorded a profit of RM1.5 million compared to a loss before tax (LBT) of RM0.8 million in Q1 FY20.
The turnaround in SNC's profitability was underpinned by jump in revenue by close to three times to RM22.2 million in the Q1 compared to RM7.56 million in the same quarter previous year.
Managing director Emily Sow Mei Chet said the turnaround in the company's financial results is a good start as the company have been struggling with losses since FY17.
"We are cautiously optimistic that we could sustain the recovery of our businesses for the rest of the year, driven mainly by the strong outlook for the global furniture market and our diversification plans into the construction business segment," she said in a statement today.
Emily also shared the momentum growth for SNC is likely to be maintained in the coming months, as seen by the rising demand for furniture goods globally.
On a quarter-on-quarter (qoq) basis, the company's revenue jumped by 79.0 per cent to RM22.2 million in 1Q FY21 from RM12.4million in the fourth quarter (4Q) FY20, clearly demonstrating that the momentum growth in SNC's financial results is sustained into the current quarter.
Aside from the strong momentum in its manufacturing and trading businesses, SNC's construction businesses have also picked up during the current quarter, securing new construction projects around Melaka's Krubong and Bukit Lintang areas.
The company expects to bid more tenders and negotiations of new construction projects in the next two quarters.
However, the plans are subject to the country's management of the on-going Covid-19 pandemic.
"The last year has been a challenging year for all businesses, and we were not spared from the disruptions from the Covid-19 pandemic.
"However, we have seen a surge in demand for furniture globally now. As a result, new orders have been keeping us busy, and we're cautiously optimistic that we could sustain our growth momentum throughout FY21," she said.
According to Emily, the strong furniture industry outlook globally will help SNC's financial performance turnaround in FY21.