Business

Thursday May 22, 2008

Success Transformer net profit up 63% in Q1

By YEOW POOI LING


PETALING JAYA: Success Transformer Corp Bhd posted a 63% jump in net profit to RM5.1mil for the first quarter ended March 31 from a year ago, thanks to double-digit growth in its three core businesses of transformers, industrial lighting and process equipment.

Revenue rose 65.5% to RM42.6mil compared with RM25.8mil previously. Earnings per share improved to 4.25 sen from 2.69 sen a year earlier.

The company has declared a tax exempt interim dividend of 6%, payable to shareholders on July 10.

“We expect an equal profit mix from the three main divisions and foresee significant growth potential from both local as well as overseas demand.

“This can expand our bottom line in the long term,” managing director Tan Ah Ping said in a statement.

There was a bigger contribution from the group’s subsidiary, Seremban Engineering Sdn Bhd (SESB), this year as the revenue and profit for three months was included in the quarter under review compared with one month in the corresponding quarter in 2007.

Success bought 60% of SESB early last year. The acquisition was completed on March 1, 2007.

Tan said the subsidiary, which has secured international accreditation, was in a better position to clinch process equipment jobs, including unfired pressure vessels, heat exchangers, silos and storage tanks, in the US and Europe.

From this month onwards, Success would see the full impact of the consolidation of SESB since it bought the remaining 40% of SESB in April for RM21.8mil.

Group financial manager Wong Wai Hung told StarBiz that the first-quarter results turned out well despite the shorter working days.

On the weakening US dollar, he said Success could leverage on natural hedging, given that more than 50% of its raw materials were imported.

Furthermore, the contracts for markets like Europe and Singapore would be negotiated in euro and ringgit respectively, he added.

At the company AGM earlier, executive director Woh Way Cheang said demand for transformers and industrial lighting would be supported by private sector projects.

The three business segments would also see expansion in terms of exports, he said, adding that SESB was looking for waste management jobs in the oil and gas industry.


SUCCESS : [Stock Watch] [News]

  • E-mail this story
  • Print this story