KUCHING: CCK Consolidated Holdings Bhd’s (CCK) Indonesian business operation has increased its contribution to group revenue with higher production and sales of sausages.
The contribution rose to about 16 percent of group revenue of RM151.9 million in financial year ended Dec 31, 2018 (FY-2018) from 14 percent in FY2017 when revenue stood at RM154.3
million.
The Indonesian nugget line, which produces sausages, was commissioned in third quarter 2018 (3Q-2018).
“We are optimistic that our Indonesian operations will continue to improve their contributions towards the group’s performance,” CCK said when releasing its latest financial results. The group has business operations in Pontianak, west Kalimantan and Jakarta.
An integrated poultry firm, CCK’s core businesses are in the rearing and production of poultry products (poultry segment), supply and trading of food products and related services (food service segment), rearing and production of prawns and seafood products (prawn segment) and trading of cold storage products (retail segment).
At end-2018, the group has 58 sales outlets in Sarawak and Sabah, three more than 55 in 2017.
In FY-2018, CCK group net profit fell to RM27.9 million from RM31.1 million in FY2017 despite an increase in group turnover to RM623.2 million from RM609.3 million. Earnings per share dipped to 4.43sen from 9.91sen.
“Feed costs in the second half of 2018 increased due to the higher prices of raw materials, thus affecting the performance of the poultry segment for 2018.
“The share of result of our associate company (Gold Coin Sarawak Sdn Bhd) declined approximately 9 percent to RM4.1 million,” said CCK.
The 2018 yearly profit was affected by the dismal performance in 4Q, which saw group net profit slumped more than 50 percent to RM4 million from RM8.9 million a year ago as revenue dropped marginally to RM151.9 million from RM154.3 million.
As compared to 3Q-2018, the prawn segment’s results fell sharply to RM81,000 from
RM825,000.
“The decline is mainly attributed to competition from Indian prawn suppliers who are able to sell globally at comparatively lower selling prices,” said CCK.
The food service segment’s results were also impacted – fell from RM353,000 in 3Q to RM58,000 in 4Q – as the group’s first F&B outlet which commenced business on Oct 1, 2018 had contributed negatively to its performance.
In addition, CCK said the weakening of the ringgit against the US Dollar of two percent since September, 2018 had resulted in an increase in cost of its imports of frozen products, particularly beef and lamb from
Australia.
CCK has recently completed subdivision of one existing ordinary share into two ordinary shares and bonus issue of about 315.4 million free warrants on the basis of one warrant for every two subdivided shares.
On future prospects, CCK said the group was expected to open six more retail outlets in Sabah and Sarawak this year.
“Amidst a background of unstable USD/MYR rates and rising costs, the group is hopeful that it will be able to maintain a positive performance in 2019,” it added.
