$CCK / 7035 (CCK CONSOLIDATED HOLDINGS BERHAD) ‘s Q1FY24 Quarterly Report Summary:

# Comparing current quarter (Q1FY24) with preceding year corresponding quarter (Q1FY23):

- Rev increased by 8% to RM 260.72 mil due to outperformance from the retail segment and improved performance from the poultry segment, which offset the decline in the prawn and food service segments. Retail segment grew 10.1% due to matured contri from their established retail network. Total poultry segment rev increased by 14.5% to RM 93.2 mil due to higher sales vol from their institutional clients and their own retail stores. The prawn segment’s rev declined marginally as export sales vol to key market moderated, but this was cushioned by higher sales via their own retail channels.
- Gross profits rose by 28% to RM 62.62 mil.
- PBT climbed by 31% to RM 27.46 mil due to outperformance from the retail and poultry segments. Better retail segment profitability was driven by a more favorable product mix and increase sales vol. Higher poultry segment profitability was due to effective cost control, a strategic alignment of the product mix and favorable movement in feed input costs. Prawn segment’s profitability was resilient and marginally higher than the previous quarter despite decrease in export sales vol because of higher domestic sales and better ASP in key export markets. Lower food service segment profitability was due to lower sales vol.
- Gross margins improved to 24% from 20.3%.
- PAT also climbed by 32% to RM 21.37 mil
- Net profit margin rose from 6.7% to 8.2%.
- EPS improved from 2.60 sen to 3.44 sen.
- NOCF decreased by 53% to RM 8 mil due to increase in current assets and higher income tax paid.
- Net cash.
- Geographical Revenue Segmentation: Malaysia (74%), Indonesia (19%), Japan (5%) and Taiwan (1%).
- No additional stores were opened in Q1FY24.

# Comparing current quarter (Q1FY24) with immediate preceding quarter (Q4FY23):

- Rev increased by 25 to RM 260.72 mil. Retail segment delivered a marginally higher rev of RM 203.3 mil due to healthy overall sales vol from our established retail network and robust demand for their Indonesia sides’ in-house manufactured processed products. Total poultry segment recorded an 5.3% increase to RM 93.2 mil due to higher demand. Prawn segment’s rev decreased marginally to RM 21.8 mil due to lower export sales vol, but this was cushioned by higher local sales. Food service segment reported lower rev of RM 4.8 mil due to lower sales vol and demand from the gov schools in Sarawak covered under their supply contracts.
- Gross profits improved by 7% to RM 62.62 mil.
- PBT however dropped by 3515 to RM 27.46 mil due to high base effect, as the poultry segment benefitted from the Gov subsidy in relation to the price ceilings for chicken and eggs in Q4FY23.
- Gross margins improved to 24% from 22.9% as the overall profitability of all key segments remained robust.
- PAT also dropped by 33% to RM 21.37 mil.
- Net profit margin worsened from 12.4% to 8.2%.

# Prospects:

- Employing a vertically integrated biz model, this enables them to exert greater control over their supply chain and operations.
- The volatility of the USD against MYR remains a concern as it leads to fluctuations in prices of corn and soy.
- Feed prices constitute a significant portion of the poultry segment’s costs.
- Strategically expanding their retail network remains integral to their growth trajectory, with a concerted focus on optimizing economies of scale and enhancing the efficiency of their fully integrated supply chain.
- The Group is cautiuosly optimistic with regards to the financial performance of the remaining quarters of the current FY.