KUALA LUMPUR: Automotive upholstery maker Pecca Group Bhd (PGB) posted a net profit of RM13.01 million in the first quarter (Q1) ended September 30, 2023 (FY24) compared to RM8.35 million in the same quarter last year as higher sales of upholstery car seat covers and improved operational efficiency fueled a 56 per cent increase in net profit.
Revenue rose 17 per cent year-on-year (YoY) to RM64.05 million from RM54.86 million a year ago.
In Q1 FY24, PGB's revenue was driven by demand for leather upholstery and the sewing of fabric car seat covers.
These subsegments each contributed about 90 per cent and 5 per cent of the company's total revenue, respectively.
The original equipment manufacturer (OEM) upholstery car seat segment contributed about 88 per cent of the total revenue for car seat covers, whilst the replacement equipment manufacturer (REM) and pre-delivery inspection (PDI) segments contributed about 3 per cent and 9 per cent, respectively.
PGB's net profit margin for the quarter was 20.3 per cent, a 34 per cent increase from last year's quarter.
The company's profitability improved due to reduced operating costs as PGB's production facilities reaped the benefits of economies of scale.
Chief executive officer Foo Ken Nee said that as PGB continues to meet the growing demand for high-quality automotive upholstery, its focus on operational efficiency has enabled it to reap rewards from economies of scale.
"We remain dedicated to maintaining this positive trajectory and delivering value to our stakeholders.
"We are also working aggressively to expand our local and foreign customer base in the REM segment and penetrate new markets in the US, Australia, New Zealand, Singapore and Europe.
"This year, we have been meeting existing and potential REM customers worldwide," he said in a statement.
Foo said that in FY24, PGB will continue efforts to diversify into new markets and transform the company into a multiple-engine growth ecosystem.
"Our strong cash position, which has risen to RM112.60 million as of Q1 FY24, will give us the firepower to catalyse our growth," he said.
Executive director Teoh Zi Yi said that looking ahead, PGB's aviation division can emerge as a key revenue driver for the company and ride the recovery in global air travel.
"We have already achieved a key milestone in Q1, with our first purchase order from a European commercial aviation customer via our collaboration with Aero Cabin Solutions, our maintenance, repair and overhaul (MRO) partner from France.
"In addition, through our stake in PT Gemilang Maju Kencana, we have established a physical manufacturing presence in Indonesia, giving us a foothold in one of the region's biggest car markets.
"PT Gemilang's product portfolio, its extensive partnerships across the Indonesian automotive industry, and our manufacturing capabilities and financial strength make this a truly synergistic acquisition," he said.