KUALA LUMPUR, 28 February 2022 - Automotive leather upholstery maker Pecca Group Berhad (“Pecca” or “Group”) reported an all-time-high quarterly revenue in the second quarter ended 31 December 2021 (“2Q22”), fuelled by stronger sales from its Automotive segment whose clientele include Proton, Perodua, Nissan, Toyota, Peugeot and Volkswagen. Pecca believes that the best is yet to come as major car makers forecast higher sales in 2022, thus creating a greater demand for the Group’s market-leading products.
Pecca recorded a revenue of RM45.2 million in 2Q22, representing an increase of 15% year-on-year (“y-o-y”) from RM39.5 million in the preceding year’s corresponding quarter. The stronger topline was achieved as almost all major geographical markets of Pecca - namely Malaysia, Europe, Oceania and North America – posted encouraging revenue growth.
In the quarter under review, the Group’s leather upholstery and healthcare businesses contributed approximately 79% and 11% of the total revenue respectively. Original Equipment Manufacturer (“OEM”) leather car seat segment contributed approximately 82% of the total revenue for leather car seat covers while Replacement Equipment Manufacturer (“REM”) and Pre-Delivery Inspection (“PDI”) contributed approximately 7% and 11% respectively.
Meanwhile, revenue generated from the Healthcare business is relatively consistent at RM4.81 million as opposed to RM4.84 million in the preceding year’s corresponding quarter. The revenue of the Aviation segment, on the other hand, rose by 24.8% y-o-y to RM151,000 as compared to RM121,000 a year earlier.
Pecca reported a net profit of RM6.0 million in 2Q22 as compared to RM6.05 million in the preceding year’s corresponding quarter. The slight decrease of 0.82% in net profit is mainly due to the increase in logistics and shipping costs for the Automotive segment.
Nevertheless, the Group continued its double-digit net profit margin momentum in the second quarter, with a healthy margin of 13.3%.
Datuk Kelvin Teoh Hwa Cheng (“张燊”), Managing Director of Pecca Group Berhad said:
“Our operational performance was boosted in the second quarter as some of the orders delayed from the first quarter due to the lockdown were carried into the October to December 2021 period. In addition, our production capacity remained above pre-pandemic level and this allowed us to meet the rising demand in the market.
Within the Group, amidst the growth in sales volume, Pecca remains committed to making its operations more efficient and controlling its production costs. These would be accomplished without compromising on our product quality and slowing down our research and development efforts to increase product quality. As part of the efforts to enhance operational efficiency, Pecca had on 12 January 2022 entered into a Sale and Purchase Agreement to acquire a 4.31-acre industrial land in Serendah, Selangor to build its second manufacturing facility.
Looking ahead, we are hopeful for a stronger year as car manufacturers are ramping up their productions amidst a strong demand that is partially spurred by the sales tax exemption incentive for passenger vehicles till 30 June 2022. Pecca will not only benefit from the stronger demand for vehicle leather upholstery, but also from the elevated demand for face masks as COVID-19 cases continue to spike.
Our Healthcare division has the capacity to produce up to 30 million face mask units per month, including more advanced respirator type-masks models such as KF94, KN95 and N95 duckbill. With our OEM customer Rentas Health Sdn Bhd working fast to market our products across Malaysia, we are confident that the Healthcare division will further boost our bottomline moving forward.”
For the first six months of financial year 2022 (“1HFY22”), Pecca registered a revenue of RM67.99 million compared to RM72.61 million a year earlier. The Automotive segment contributed RM56.41 million, while the Healthcare and Aviation segments delivered RM11.30 million and RM0.28 million in revenue respectively.
Net profit for the period was recorded at RM6.51 million, in contrast to RM11.15 million in the preceding year’s corresponding period. The bottom line was impacted by the weaker performance in the first quarter following the government-imposed total lockdown from June to middle of August 2021, which caused the leather upholstery division to shut down temporarily.
In a separate development, Pecca held its Extraordinary General Meeting today on 25 February 2022 to seek shareholders’ approval for its proposed bonus issue exercise, which aims to reward shareholders and widen investor base. The Group is delighted to announce that it received unanimous approval from the voting shareholders for the bonus issue.
Under the exercise, up to 564 million new ordinary shares (“Bonus Shares”) will be issued in Pecca on the basis of 3 Bonus Shares for every 1 existing Pecca share held by its shareholders.
