SINGAPORE (Feb 6): Yoma Strategic Holdings reported earnings of $16.8 million for the 3Q ended December on the back of the disposal of its tourism business in Myanmar, compared to earnings of $0.3 million a year ago.
The group in Dec 2017 completed the sale of its tourism business and recognised a net gain of approximately $27.7 million.
Revenue remained stable at $24.1 million in 3Q18, compared to $24.0 million year ago.
Revenue from the group’s Automotive & Heavy Equipment segment increased by 37.0% to $13.9 million in 3Q18, from $10.2 million a year ago.
This mainly contributed by revenue from Convenience Prosperity Company, which is in the trading business of New Holland tractors and JCB construction equipment.
Convenience Prosperity recorded trading revenue of $11.8 million in 3Q18 on the back of the completion of the delivery of the first 600-tractor order secured under the Ministry of Agriculture and Irrigation’s nationwide mechanisation programme, as well as increased sale of JCB construction equipment.
On the consumer business front, revenue from its KFC stores grew to $3.9 million, from $3.0 million a year ago, due to a higher number of stores in 3Q18.
As at end December, Yoma Strategic has 21 KFC stores throughout Myanmar.
These were partially offset by lower revenue generated from the sale of residences and land development rights, which fell to $1.4 million in 3Q18, from $6.1 million a year ago.
The decrease was mainly due to the group’s change in sales strategy for StarCity’s Zone C following the recent buy-back of the development to keep some units for long-term rental while re-designing other units to meet the demand for smaller units.
Additionally, real estate revenue continued to be impacted by the group’s sales strategy to only sell near-completed units in Pun Hlaing Estate.
Gross profit fell 34.9% to $6.5 million in the quarter, as gross profit margins plummeted to 27.0% in 3Q18, from 41.4% a year ago.
This was mainly due to the higher portion of revenue generated from the Automotive & Heavy Equipment segment, which has lower margins compared to the Real Estate segment.
Administrative expenses rose 31.9% to $14.6 million, from $11.0 million a year ago.
This was largely due to the increase in the number of KFC stores and Convenience Prosperity branches as well as administrative expenses related to the Yoma Central project.
Finance expense fell by 90.1% to $1.2 million, from $11.8 million a year ago.
As at end December, cash and cash equivalents stood at $17.9 million.
In a separate filing to SGX on Tuesday, Yoma Strategic says it has utilised US$3.0 million ($4.0 million) of the net proceeds from the placement completed in Nov 2017 towards investments in its Real Estate businesses, while US$5.3 was used for investments in its Automotive and Heavy Equipment businesses and US$4.8 million was used for investments in its Consumer businesses.
The group says it has fully disbursed the gross placement proceeds of $82.2 million in accordance with the intended purposes and percentage allocation set out earlier.
“We are pleased with the high growth in our Heavy Equipment, Yoma Fleet Leasing and KFC businesses and expect them to contribute meaningfully to the group in the coming years,” says Melvyn Pun, Yoma Strategic’s CEO.
“The current market provides us attractive expansion opportunities which focus on domestic consumption patterns, namely in the consumer and financial services sectors,” he adds.
Shares of Yoma Strategic closed 1 cent lower at 49 cents on Monday.
