MALEE endures short-term costs Positioned for strong growth in second half
11 May 2018
Bangkok – 11 May 2018 – Malee Group Public Company Limited announced its Q1/2018 sales of Baht 1,361 million, net profit of Baht 9 million, and EBITDA of Baht 75 million.
Ms. Roongchat Boonyarat, Chief Executive Officer of Malee Group Public Company Limited (“MALEE”) disclosed the operating results for Q1/2018 that, “In Q1/2018, the Company and its subsidiaries recorded total sales of Baht 1,361 million, a decrease of 10% YoY, with net profit of Baht 9 million, a decrease of 92% YoY. Sales declined from export Contract Manufacturing Business (CMG) and export branded sales. However, domestic CMG grew outstandingly from new products as well as growth from some exiting products. Domestic branded was quite maintained.
Ms. Roongchat continued that “In Q1/2018, the Company’s sales declined mainly due to export CMG and export branded business, while the Company’s costs increased from investments to build the foundation for future business growth. Since some investments cannot generate revenue immediately, and some investments are not fully utilized or have not reached the optimal level yet; cost per unit was higher at this point, and should continue to impact the Company’s performance for the short term. However, the Company’s operating performance is expected to rise from Q3/2018 onwards, as the Company will be able to get more benefits from those investment projects.”
Ms. Roongchat further clarified that “In the past 3 years, the Company has been building its foundation and strengths for future business growth, i.e. investments in plant and machinery, aiming at higher production efficiency, reduced production cost, quality systems improvement, investments in research and development; adding the competent personnel; establishment of a new subsidiary; building business partnerships and establishing joint ventures in the Philippines, Indonesia, and Thailand; and the latest, an acquisition of 65% ownership in a beverage company in Vietnam which will enhance the Company to expand beverage business in emerging countries in Southeast Asia. Recent investment projects of the Company are following its regional networking strategy, planning to utilize the strengths of its partners in each country to build a strong regional network, which will in turn enhance the Company to strengthen its competitiveness to sustainably accelerate growth in the region.”
Ms. Roongchat added that “The Company has completed its investment in the must-have projects which are necessary for driving sales. For the nice-to-have projects which will help enhance efficiency or reduce costs, the Company will hold those investments for the time being. After all invested projects are able to turn from cost to income, and the Company’s operating performance is recovered and improving, then the Company will reconsider the adjourned projects again. In other words, the Company will not have major capex within this year.”
The Company is putting its full efforts in order to achieve the sales target growth of 30% in 2018, where the strong growth will be seen in the second half of this year, according to the Company’s business plan. The Company has different business plans for each business segment. For domestic branded business, the Company is planning to launch new products into new categories besides ready-to-drink fruit juice, mainly focusing on health products but also able to reach the mass market, which should be starting from end of Q2/2018 onwards. For export branded business, the Company will be able to start a beverage business in Vietnam as well as a joint venture business in Thailand distributing personal care products from end of Q2/2018 onwards. For joint venture business in Indonesia, it should be in operation in Q4/2018 onwards. For CMG business, the Company has been working with diversification strategy for more than one year, both in term of product groups and customers. Our new customers are undergoing their product’s trial runs, while the more rounds of trial runs, the higher quality of products. However, this also takes longer period, thus there is lapping period that reduced sales from some product group could not be immediately fully covered by new sales orders which are gradually increasing. However, after the takeoff of new customers and new products from Q3/2018 onwards, sales of CMG business will be more stable. All of which mentioned above will help support the Company to achieve its growth target for 2018”, concluded Ms. Roongchat.