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? 3QFY6/24 core net profit came in at RM7.7m (74.8% yoy) after accounting for one-off losses of RM1.7m (mainly allowance for slow-moving inventories and impairment loss on receivables).
?This brought 1HFY24 core net profit to RM21.4m (+98.2% yoy); above Bloomberg expectations (89.2% of FY24 net profit estimates).
?The earnings beat in 3QFY24 was mainly due to better-than-expected sales of personal lubricants that also led to higher-than-expected profitability of its sales mix.
?9MFY24 revenue dipped by 3.3% yoy due to lower condom sales to the tender segment. However, 9MFY24 EBITDA margins rose 4.1% pts yoy to 13.6%, while 9MFY24 core net profit rose 98.2% yoy to RM21.4m. This was mainly driven by a more profitable sales mix (more condom sales to the commercial segment and higher personal lubricant sales), the impact of the weak ringgit, and higher operating leverage.
?This was despite increases in both administrative costs (+15.0% yoy); we attribute to R&D cost for upcoming new product launches) while distribution expenses were also slightly higher (+2.7% yoy; drop in freight costs).
?On a qoq basis, 3QFY24 revenue was flattish at RM127m (-0.3% qoq), while core net profit declined 3.1%. The weaker qoq profit was mainly owing to higher operating costs, especially natural latex and logistic-related expenses.
