$LYSAGHT / 9199 (LYSAGHT GALVANIZED STEEL BERHAD): Strong Cash Position and Dividend Growth!

Here's a quick overview of $LYSAGHT / 9199 (LYSAGHT GALVANIZED STEEL BERHAD)'s Q2FY24 performance:

Revenue: RM23.83 million, reflecting a 21% YoY increase and a 6% QoQ increase. The revenue growth in both YoY and QoQ is primarily driven by higher sales in Malaysia and other ASEAN regions, while revenue from other areas declined.

Main Revenue Contributor: Malaysia remains the largest revenue contributor, accounting for 46.3% of total revenue this quarter, up from 44.7% in Q2FY23.

Profit Before Tax (PBT): RM3.47 million, a 34% increase YoY but a 26% decline QoQ. The YoY growth is mainly due to higher revenue, while the QoQ decrease is attributed to a 4% drop in the average selling price (ASP) of poles. However, this isn't a significant concern as Q2 typically records lower earnings for the company.

1HFY24 Performance: The company reported cumulative revenue of RM46.32 million, a 26% increase YoY, and a PBT of RM8.16 million, a 39% increase YoY.

Improved Cash Position: The company holds RM103.38 million in cash with no borrowings, placing it in a net cash position. This cash reserve represents approximately 86.7% of the company's market capitalization.

Positive Free Cash Flow (FCF): The company generated a positive FCF of RM7.35 million in this quarter.

Increased Dividend: LYSAGHT declared an interim dividend of 8 sen per share in this quarter, signaling a rise in dividend payouts. Last year, the company distributed 8 sen per share for the entire FY23. Given that final dividends are usually higher than interim ones, if another 8 sen per share is declared as the final dividend next year, the full-year dividend yield (DY) would be 5.6%.

Outlook: The company faces challenges from forex volatility, a slowing global economy, geopolitical tensions, inflationary pressures, and increased competition from lower-quality products. Additionally, fluctuations in commodity and crude oil prices may impact raw material costs for suppliers sourcing from overseas.