YB Ventures bounced back in black for Q1, driven by higher sales for new tiles

KUALA LUMPUR: Tiles manufacturer and information technology (IT) company YB Ventures Bhd (YVB) has swung back into profitability in the first quarter (Q1) ended March 31, 2021 (FY21) with a net profit of RM732,000, from a net loss of RM3.5 million a year ago.

The company's filing with Bursa Malaysia today shows that the turnaround was mainly driven by the higher sales volume achieved amidst the launching of its new flagship product Talos Living Tiles.

Executive director Mr Au Yee Boon said the turnaround in earnings is mainly due to the company's shift towards the premium segment with the launching of Talos Living Tiles.

"We decided to take a hit with the adoption of the lower standard cost in inventory due to our cost-efficient exercise of RM3.9 million, which resulted in lower inventory and reduced profit," he said in a statement today.

Au however, is optimistic that the earnings going forward will benefit from this exercise as the lower cost of inventory going forward will help to increase the company's profit margin.

With YVB's revenue growing at a strong double-digit in the 1Q FY21, Au is confident that company would see further profitable conditions given the strong revenue growth.

YVB's revenue increased by 31.3 per cent year-on-year (yoy) to RM30.2 million in Q1 as compared to RM23.0 million recorded in the same quarter last year.

This is in line with the robust demand for its new flagship product from both property developers and end-users.

Early this week, Securities Commission Malaysia has approved YVB's proposed issuance of 1.21 billion irredeemable convertible unsecured loan stocks (ICULS).

Based on the subscription price of RM0.04 per ICULS, the company is expected to raise RM48.5 million under the maximum subscription level.

Further, RM45.6 million has been allocated to upgrade the existing production lines and construct four new production lines.

"This is in line with our shift in focus towards the premium segment and our Talos Living Tiles, which is the first negative ion tiles launched in Malaysia.

"We are witnessing an overwhelming response for this premium product, especially when the awareness for healthy-driven products is increasing due to the Covid-19 pandemic," Au said.

He expressed confidence that the company will exceed RM30.0 million in sales target based on positive feedback from property developers and end-users.