Koda posts 40.1% jump in full-year profit to US$5.7m

FURNITURE maker Koda has posted a 40.1 per cent increase in net profit to US$5.7 million for the year ended June 30, up from US$4.1 million last year, thanks to improved economies of scale, and higher earnings from its in-house brand, Commune.

Earnings per share (EPS) came in at 8.4 US cents, versus a restated EPS of 12 US cents in the year-ago period on a post-bonus issue basis.

Revenue for FY 2018 also rose 5.9 per cent to US$52.4 million, on the back of higher sales from Commune, said Koda, which counts the United States as its largest export market.

The higher revenue from Commune, along with improved economies of scale from higher capacity utilisation and supply chain efficiency also helped gross profit margin to rise by 3.7 percentage points to 35.8 per cent.

A final dividend of 0.56 US cent (0.75 Singapore cent) and a special dividend of the same amount was declared for the current financial year, compared to a final dividend of 0.74 US cent (one Singapore cent) and a special dividend of 1.47 US cents (two Singapore cents) in the previous year.

Looking ahead, the group expects Commune's business to continue contributing positively to its financial results for the next 12 months. However, it is also mindful that the operating environment remains highly competitive, and could be clouded by growing concerns of a full-blown trade war between the US and its key trading partners, especially China.

"Whilst the widely discussed trade war could pose significant risks to our furniture business, the group is not aware of any specific tariffs announced by the US, or China that could impact its furniture sales for the time being," Koda said.

It also noted that Commune has made progress in expanding its reach abroad, with the planned rollout of 100 stores in China by 2020 remaining on track. Commune opened its very first store in Manila recently, and expects to debut in Hong Kong in October 2018.

Barring any unforeseen circumstances, the group expects to remain profitable in the coming year.

Shares in Koda closed flat at S$0.70 apiece on Monday.