LKL’s Q2 net profit dragged by SST on manufacturing inputs

KUALA LUMPUR: LKL International Bhd posted net lower net profit in the second quarter (Q2) despite a more than 32 per cent growth in revenue.

The company – provides medical/healthcare beds, peripherals and accessories – recorded RM100,000 net profit in the quarter ended October 31 2018, from RM300,000 net profit a year ago.

This was due to higher prices for manufacturing components, exacerbated by the Sales and Services Tax levied on the manufacturing inputs, LKL said in a statement.

The company’s revenue rose 32.3 per cent toRM9.56 million, due to increased deliveries to clients in both the manufacturing and trading segments.

LKL said revenue growth was led by higher sales of medical and healthcare beds, peripherals and accessories, which increased 14 per cent to RM6.8 million in Q2 2019 from RM5.9 million in Q2 2018.

Additionally, the group’s medical devices segment, which was established in June 2017, more than tripled to RM1.3 million in Q2 from RM400,000 in Q2 last year.

“This was on the back of increased adoption of the Nihon Kohden range of medical devices distributed under the newly established segment,” it said.

LKL managing director Lim Kon Lian reiterated its strategy to expand its product offerings in order to serve its clientele with more comprehensive solutions.

“We continuously add new and innovative products to our portfolio, as we strive to offer comprehensive solutions to support our clients’ advanced operating requirements.

“Our venture into medical devices distribution started with the Nihon Kohden brand, and was followed shortly by the addition of the dermaPACE® by Sanuwave Health Inc., effectively enhancing our competitiveness and service quality,” he said.

Lim said LKL had recently signed a Memorandum of Understanding with Agrow Corporation Sdn Bhd to promote and market the BREATHAIR® merchandise globally, which complements its range of medical and healthcare beds.

“We are optimistic that our ever-broadening range of solutions will prove to be a keen competitive advantage going forward,” he said.

For the first half, group’s revenue rose 43.9 per cent to RM17.3 million from RM12 million a year ago due to higher contribution across all segments.

In line with the higher revenue, LKL registered net profit of RM200,000 in H1 2019 compared to a net loss of RM600,000 H1 2018.

On its prospects, Lim said the group will continue to leverage its extensive domestic sales network as well as identify opportunities to increase the number of overseas distributors and agents to grow market presence.

“We will also remain dedicated to driving operating efficiency by increasing automation, streamlining manufacturing processes and providing training to our employees to improve productivity,” he said.

Source: NST