RGT posts 252% YoY jump in net profit

by NUR HAZIQAH A MALEK / pic credit: rgtberhad.com

RGT Bhd posted a 252% year-on-year (YoY) jump in earnings for its first quarter ended Sept 30, 2020 (1Q21), to RM4.26 million on robust revenue and better-operating efficiency and scale.

The hygiene and air care products solution provider’s revenue soared by 124% YoY to RM41.76 million in the quarter due to the strong demand for hygiene care products, which includes a manual, as well as automatic soap and sanitiser dispensers, driven by the Covid-19 pandemic.

“Sales of automatic or hands-free soap and sanitiser dispensers have picked up significantly in 1Q21 and their volume is expected to continue growing.

“Given that these automatic dispensers attract higher profit for each unit sold, earnings margins are expected to remain healthy for the foreseeable future,” the company said in a filing to Bursa Malaysia yesterday.

RGT CEO and ED Lim Seat Hoe said new customers and products will be its key focus for the foreseeable future.

“Now that we are catching up with the strong hygiene care orderbook, and our expansion programme is underway, management is now increasingly working towards growing the group,” he said in a statement.

Following the strong performance in the 1Q, the company is looking at its long-term strategy to grow both its customer base and products, as exports of soap and sanitiser dispensers have been expanding at a high level since May.

“Demand from the US and Europe was particularly strong with a respective increase of 152% and 212% compared to the corresponding preceding quarter,” it said.

It added that the management has accelerated its expansion programme to more than double the current capacity.

“Originally intended to enable RGT to serve new customers in light of the US-China trade tension and to widen its product range, the expansion will now help serve the strong orders coming from existing customers as well.

“Accordingly, the group promptly concluded the acquisition for the adjacent piece of land with a factory in September and has since commenced renovation work,” it said. The expansion is expected to complete by Dec 31, 2021.

RGT’s shares closed 6.61% or four sen higher at 64.5 sen, valuing the company at RM377.8 million.