ELK-Desa Resources Bhd posted a net profit of RM8.26 million for the third quarter ending September 30, 2024 (3Q24), down from RM8.84 million in the same period last year, as increased revenue of RM46.4 million – up from RM39.2 million – was offset by higher costs, expenses, and impairment allowances.

For the nine-month period, net profit decreased to RM16.4 million from RM17.3 million a year earlier, despite a cumulative revenue growth of 17.8% to RM92.3 million.

Profit before tax for 3Q slipped to RM11.1 million, with a cumulative nine-month pre-tax profit of RM22.1 million, slightly down from RM22.9 million.

The company declared a 2 sen per share dividend, with an ex-date of December 3 and a payment date of December 18.

Segmentally, the furniture division saw a 25% revenue increase to RM14.68 million, primarily driven by sales in Sabah and Sarawak, while the hire purchase segment revenue rose 16% to RM31.76 million.

Hire purchase receivables expanded 18% year-on-year to RM693.97 million, supported by a 26% increase in bank borrowings, though gearing remains manageable at 0.64 times.

Looking ahead, ELK-Desa remains cautiously optimistic about the domestic economy, though it is mindful of subsidy rationalisation and commodity price risks.

The company aims to reduce its impaired loan ratio by bolstering loan recovery efforts while strategically expanding its hire purchase receivables. –TMR