KUALA LUMPUR: Mestron Holdings Bhd (MHB) posted a net profit of RM1.6 million for the six months (6M) ended 30 June 2021 (FY21) compared to RM790,000 in the same period last year.
Revenue is higher at RM22.6 million, representing a 19 per cent increase compared to the revenue of RM19.0 million a year ago.
Despite full closure during June 2021, for the second quarter (Q2) FY21, the company recorded a profit of RM0.139 million while revenue increased by 39.9 per cent year-on-year (YoY) to RM10.97 million.
The company, in a filing to Bursa Malaysia, said the increase in revenue was mainly due to the implementation of the Movement Control Order (MCO) back in March last year, which has resulted in the delay of the scheduled deliveries of products for the previous financial quarter ended June 30, 2020.
The sales of higher-margin products such as speciality poles also helped boost the margin to maintain profitability during the current quarter under review.
Managing director Por Teong Eng said the increase in demand for its speciality poles, especially in the telco segment also helped to boost our profit margin.
Despite the resurgence of Covid-19 cases and the reimposed MCO 3.0, Por is excited with the Group's prospect going forward as the rollout of the 5G services in Malaysia would drive the demand for its speciality pole products as high mast and telecommunication monopole are necessary for the development of telco infrastructures.
"A faster rollout of 5G network in Malaysia is a positive catalyst for the company as this would drive the demand for our speciality pole products.
"As we have witnessed during the first half (1H) FY21, the strong demand for speciality pole products increased our profit margin and overall financial performance.
"Given that Malaysia is one of the largest markets contributing to the company's revenue, accounting for about 93 per cent of the total revenue, the sustained demand for our speciality pole products will help to accelerate earnings growth in the near term," Por said.
In July 2021, Digital Nasional Bhd (DNB), the state-owned specially purpose vehicle (SPV), announced that Ericsson would design and build its 5G infrastructure at the cost of RM11 billion.
The government has aimed to launch 5G services by the end of this year in three cities, namely Kuala Lumpur, Putrajaya and Cyberjaya.
It will also launch 5G services in five major cities and districts in Selangor, Pulau Pinang, Johor, Sabah and Sarawak by 2022.
The rollout of 5G services to cover 17 cities and rural areas is expected to commence from 2023 onwards.
Por said the company's earnings visibility in the near-term also remains intact as seen by the healthy orderbook, more than eight months turnover of the company.
Aside from that, MHB will partner with Samdo Smart Solar (M) Sdn Bhd to jointly undertake engineering, procurement, construction and commissioning (EPCC) services for six solar power systems for telco towers in Malaysia.
Por believes that the joint venture is expected to contribute a sustainable and recurring income stream for the company going forward.
"We are cautiously optimistic of the prospect for MHB, but we can't rule out the potential disruption from the reimposed MCO 3.0 on our production.
"This could also have an impact on the rollout of the 5G services.
"Having said that, we are confident that the better cost-control measures undertaken by the company will ensure sustainable growth for MHB," Por said.