Ichitan Group unveils high Q1 net profit with 247.1% YoY growth, aiming for continuous growth in Q2 through regional exports

Stocks and Financial Services Press Releases Thursday May 16, 2019 14:18
Bangkok--16 May--IR PLUS

Ichitan Group Public Company Limited (SET:ICHI) today announces a strong net profit growth of 247.1% YoY in the first quarter worth 114.2 million baht, accounting for net profit margin of 8.7%. Such profit is derived from management efficiency and a well-executed strategy for the export markets, with exports making up 32.4% of total sales. Subsidiary PT Ichitan Indonesia also records a lower loss in net profit, reflecting ICHI's bright operating result outlook with Q2 results poised to continue a strong growth momentum.

Tan Passakornnatee, Chairman of the Board of Directors of ICHI, said the company's net profit in the first quarter leapfrogged from 32.9 million baht logged in the same period last year, accounting for 2.5% of net profit margin from sales revenue in 2018. Strong first-quarter results came from the company's focus on enhancing management efficiency in terms of production and marketing, while the planned strategy to penetrate regional export markets went as expected.

The company's sales revenue amounted to 1.32 billion baht, down 0.2% from a year earlier. With product management revamp strategy and the launches of new products, ICHI expects to see improving earnings in period ahead.

ICHI recorded selling expenses worth 1.06 billion baht, accounting for 80.4% of sales cost per sales revenue, down 2.5% year-on-year compared to selling expenses valued at 1.09 billion baht or 82.9% of sales cost per sales revenue in last year's corresponding period. Lower selling expenses were attributed to greater efficiency in production.

For distribution costs, they were logged at 95.5 million baht, a decline from 141.6 million baht registered in the same period last year. The ratio of distribution costs per sales was recorded at 7.2%, down from 10.7% in the first quarter of 2018, thanks to how the company had proficiently managed its advertising plan.

The company registered a share of losses from its joint venture investment at 6.4 million baht, down by 24.9 million baht from losses worth 31.3 million baht logged in last year's corresponding period. Lower losses were derived from a reduction of marketing expenses in Indonesia, reflecting sanguine growth outlook for PT Ichitan Indonesia.

Operating results in the second quarter are anticipated to improve continuously due to the upcoming promotional campaigns for summer, aiming at stimulating sales growth. These campaigns have been well-received by customers. The company also plans to unveil new products such as YenYen Fun, which offers in two flavors: a mixed herbal cooling tea assorted with coconut jelly and grass jelly as well as a honey- flavored chrysanthemum tea mixed with coconut jelly.

More thirst-quenching beverages to be unveiled are Ichitan Chew Chew, a fruity green tea mixed with a new formula, offering in two flavors: Kyoho grape and lime honey, and Shizuoka Hojicha, a premium roasted green tea where tea leaves are 100% imported from Japan, cooperation project between ICHITAN PLC and Shizuoka Prefecture, Japan. All in all, ICHI targets a 12% year-on-year revenue growth from last year's total revenue worth

5.21 billion baht.

"The overall green tea market in Thailand saw a slowdown in the previous period along with a fierce competition. We therefore devised marketing and sales strategies to a full extent together with penetrating export markets in Cambodia, Laos, Myanmar, and Vietnam, resulting in a successful performance in the first quarter," said Mr. Tan.

"The export portion currently contributes to 32.4% of our sales revenue, while PT Ichitan Indonesia has been well-received by consumers through newly distributed products and continuous brand-building awareness. All of these resulted in a net profit of 114 million baht, a 247% year-on-year rise from full-year net profit of 44 million baht in 2018," he said.

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