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PETALING JAYA: ELK-Desa Resources Bhd a non-bank lender focused in the used-car segment, registered a 16% increase in revenue to RM46.63 million for the fourth quarter ended March 31, 2024 compared with RM40.30 million in the corresponding quarter a year ago.
This was due to higher contributions from both its hire purchase and furniture segments. The group's profit before tax (PBT) for the quarter increased by 32% to RM13.10 million from RM9.95 million, largely as a result of higher contribution from its hire purchase financing segment.
On a cumulative basis, the group’s revenue was 8% higher at RM167.78 million compared with RM155.24 million last year. Nevertheless, PBT declined by 23% to RM49.04 million from RM63.31 million, primarily due to the absence of reversal of impairment allowance for the hire purchase segment that occurred in the first quarter of the previous corresponding year.
In Financial Year 2024, the group’s furniture segment recorded a slight increase in revenue to RM54.55 million from RM54.48 million due to higher furniture sales. However, gross profit margin for the segment decreased to 35% from 38%, mainly due to higher imported good purchase cost as a result of weaker foreign exchange, write-down of inventory cost and general margin squeeze from stiffer competition. Mainly as a result of the decline in gross profit margin, the furniture segment registered a 46% drop in profit before tax to RM2.99 million from RM5.49 million a year ago.
Executive director and chief financial officer Teoh Seng Hee said, “We are happy to note that ELK-Desa delivered a commendable performance in FY2024, which was reflected in the second highest profit levels ever recorded in our history, primarily due to the expansion of our hire purchase receivables, which have surpassed pre-Covid levels.
“In FY2025, we aim to sustain this growth momentum further by expanding our hire purchase receivables moderately between the lower and mid teens in terms of percentage,” he added.
“We have ended the financial year on a positive note with our gross impaired loans ratio of 1.9% and net impaired loans ratio of 0.6% as at 31 March 2024. This was mainly due to our ability to resume full scale recovery activities throughout FY2024. Prior to this, our recovery activities have been curtailed as a result of the pandemic. As we move further into FY2025, the group will be focused on driving down impaired loans ratio even more by pro-actively engaging our customers and maintaining our pace in recovery efforts,” Teoh said.
He added that ELK-Resources will continue to grow the presence of its furniture segment in Sabah and Sarawak
“We plan to bolster our logistic arrangements in order to have a competitive edge over other wholesalers. In an effort to become more competitive within the markets in East Malaysia, we aim to offer more in terms of diversity and range of products, while positioning ourselves as a trusted partner in delivering quality and value for money furniture products,” Teoh said.
The board of directors has declared a second single-tier interim dividend of 3 sen per share in respect of the financial year ended March 31, 2024. The dividend will be paid on June 20.
In addition to the first interim single-tier interim dividend of 2 sen per share which was paid on Dec 18, 2023, the total dividend for the financial year ended March 31, 2024 is 5 sen per share (FY2023: 6.50 sen). This represents a dividend payout ratio of about 62% of the net profit, which is higher than the dividend policy of 60% set by the board. The board of directors will not recommend any final dividend for the financial year ended March 31, 2024.
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