$FPI / 9172 (FORMOSA PROSONIC INDUSTRIES BERHAD) ‘s latest QR is out and the results aren’t very positive. Net profit and net profit margin for FY2023 on paper might look like the company’s results are better than previous years but those numbers have taken into account 2 one-off gains item. In short, demand for speakers continues to remain subtle.

# Comparing current quarter (Q4FY2024) with preceding year corresponding quarter (Q4FY2023):

- Rev dropped by 14.8% to RM 153.94 mil due to lower sales vol.
- However, gross profit only dropped by 3% to RM 26.32 mil.
- Other Income shot up by 448% to RM 25.65 mil due to gain on disposal of subsidiary (70% equity stake in Wistron Technology (Malaysia)) amounted to RM 20.1 mil.
- Distribution costs gained 161% to RM 5 mil (increase in freight costs?)
- -Other expenses also increased by 195% to RM 5.70 mil
- PBT sill surged by 179.2% to RM 37.29 mil due to one-off gain on disposal of subsidiary.
- PAT also surged by 297.8% RM 32.39 mil.
- Net profit margin jumped from 4.5% to 21%.
- EPS jumped from 3.17 sen to 12.68 sen.
- NOCF decreased by 29% to RM 56.98 mil.
- First interim dividend of 23 sen per share was declared.

# Comparing current quarter (Q4FY2024) with immediate preceding quarter (Q3FY2024):

- Rev declined by 34.3% to RM 153.94 mil due to lower sales vol.
- PBT dropped by 39.1% to RM 37.29 mil due also to forex loss.
- Excluding one-off gain items, PBT would be at RM 17.20 mil.
- PAT also dropped by 33.7% to RM 32.39 mil.
- Net profit margin slightly improved from 20.8% to 21%.

# Comparing YTD ended 31 Dec 2023 with YTD ended 31 Dec 2024:

- Rev decreased by 31.5% to RM 673.90 mil due to lower sales vol.
- PBT would have been down by 15% to around RM 89.70 mil after excluding the one-off gain on property disposal (RM 7.5 mil) completed in 18 July 2023 and gain on disposal of subsidiaries (RM 20.1 mil). Lower forex gain also contributed to lower profitability.
- Net cash of RM 361.94 mil. Cash and equivalents works out to be around RM 1.40 per share.
- Net profit margin improved from 10.8% to 17.4%.

# Prospects:

- The Board anticipates that the operating environment continues to be challenging in the coming quarters due to still persistent strong headwinds from inflationary pressure and high interest rates.