KUALA LUMPUR: Total door system solution provider Econframe Bhd’s net profit marginally increased by 6.6& to RM3.4 million for the second quarter (Q2) ended 29 February 2024 (FY24) from RM3.2 million posted in the same quarter last year.
Revenue for the quarter stood at RM27 million, a rise of 46.4 % year-on-year (YoY) from RM19.6 million in Q2 FY23.
However, pressure on the company’s gross profit margin and higher professional fees incurred led to a smaller-than-proportionate increase at the bottom-line.
For the first half (1H) FY24, Econframe’s revenue was up 53.5% YoY to RM54.2 million compared to RM35.3 million a year ago.
This was also the first time Econframe’s first-half turnover surpassed the RM50 million mark.
The double-digit improvement was mainly attributed to stronger sales and a contribution from its aluminium glazing and façade works business, Lee and Yong Aluminium Sdn Bhd (LYASB).
In tandem with the solid top-line performance, Econframe also recorded the highest-ever first-half net profit jumped 41.4% YoY to RM7.8 million versus RM5.5 million in 1H FY23.
Group managing director Lim Chin Horng said having started the financial year on a firm footing, the company have kept the ball rolling by delivering its first half performance.
“The demand for our existing business remains healthy and we have been replenishing our order flow by seizing opportunities in Klang Valley as well as Johor.
“Meanwhile, we continue to reap the synergies with LYASB. With an enlarged order book following new projects secured and plans for capacity expansion, we are excited by what is ahead,” he said in a statement.
Econframe entered into a conditional share sale agreement (SSA) with ETA Industries Sdn Bhd in January 2024 to acquire a 70% equity interest in ETA World Sdn Bhd for RM56 million.
Of this, RM28.1 million is to be satisfied in cash, and the remaining RM27.9 million will be obtained via the issuance and allotment of 30 million new ordinary shares in Econframe.
The acquisition comes with a profit guarantee by the vendor that ETA World shall achieve an audited net profit of not less than RM10 million each year for 3 years and a cumulative audited net profit of not less than RM30 million.
“On the corporate front, the acquisition is expected to be completed in the first half of 2024, barring unforeseen circumstances.
“Upon completion, this will allow us to leverage ETA World’s position as a leading industrial property builder to tap into the vast opportunities in the industrial property space.
“This would enhance and diversify our earnings, especially given the profit guarantee. Overall, we continue to be upbeat on Econframe’s bright prospects ahead,” Lim said.
