CCK’s 9MFY25 results misses expectations on weaker retail sales

KUCHING (Nov 28): CCK Consolidated Bhd’s (CCK) first nine months of financial year 2025 (9MFY25) results have missed expectations due to weaker-than-expected sales from its retail segment says analysts from Public Investment Bank Bhd (PublicInvest Research).

During CCK’s third quarter (3QFY25), the group’s revenue increased by 1.9 per cent y-o-y to RM264.5 million thanks to stronger contribution from its retail and prawn segments which helped to offset an 8.7 per cent year on year (y-o-y) decline of the group’s poultry segment due to lower demand.

However, the group’s 3QFY25 PATAMI fell by 25.1 per cent y-o-y to RM17.5 million due to lower contributions from it poultry and retail segments as well as a non-controlling interest amounting to RM3.4 million, following the partial divestment of its stake to Indonesia’s Creador.

The group’s retail segment margins fell to 8.7 per cent from 9.4 per cent a year ago due to lower economies of scale while its poultry segment saw a decline in earnings by 45.5 per cent y-o-y due to lower government subsidies.

Cumulatively, the group’s 9MFY25 core PATAMI fell by 17.7 per cent to RM52.8 million.

PublicInvest Research guided that this was below their expectations as it met 67 per cent of their full-year earnings estimates and that the negative deviation was due to weaker retail sales.

To reflect these weaker sales assumptions moving forward, the research arm cuts their earnings forecasts for FY25 to FY27 by an average of four per cent.

Nevertheless, they foresee CCK posting stronger earnings in 4QFY25 thanks to festive year-end spending and higher minimum wages which should support consumer spending.

And further ahead, they also reckon CCK’s Indonesia operations will be a key earnings driver in FY26, supported by its ongoing pans to triple its existing production capacity to circa 60MT per annnum.

“We understand that the new plant is on track to complete by end of the year and is slated for commissioning next year. With this additional capacity, CCK could expand its distribution channels into new markets such as Medan and Surabaya,” they said.

They added that lower input costs from poultry feed and the appreciation of the Ringgit should also cause an uptick in CCK’s profit margins.

“All told, we maintain our ‘outperform’ call with a lower target price (TP) of RM1.45, based on 10-times FY26F earnings per share (EPS).”