Mestron delivers impressive results in third quarter

PETALING JAYA: Mestron Holdings Bhd achieved resilient earnings growth with profit after tax (PAT) increasing by 6.89% to RM3.57 million in the third quarter of the 2023 financial year (Q3’23), bolstered by a decrease in raw material costs and heightened demand for specialty poles, especially in the telecommunications sector.

The performance was even more impressive given the challenging economic conditions characterised by volatile foreign exchange rates, rising interest rates and inflation. This profit surge is in line with an 11.5% increase in revenue, which reached RM41.44 million in Q3’23 compared with RM37.16 million in Q3’22. The revenue boost primarily stems from heightened sales of standard and specialty poles, particularly for telecommunications.

Mestron managing director Por Teong Eng said, “We have successfully leveraged our dedication to quality and innovation to sustain a robust growth path. Our recent performance is a testament to our effective strategies. Our track record in the industry demonstrates our resilience and adaptability in responding to market needs, ensuring our continued success and leadership in the sector.”

For the first nine months of FY23 (9M23), MHB’s PAT soared by 40.15% year-on-year (y-o-y) to RM9.41 million, from RM6.72 million in the corresponding period a year ago. This significant improvement was fuelled by reduced raw material costs and a spike in demand for specialty poles in the telco sector. Consequently, the group posted 29.28% revenue growth to RM106.14 million in 9M23, compared with RM82.1 million in 9M22.

About 85.7% of the group’s revenue in the quarter under review came from the manufacturing sector, primarily driven by sales of standard and specialty poles for telcos. The Malaysian market remains the primary contributor, accounting for about 94.9% of total revenue.

“The Malaysian market continues to be the main growth driver for us. The notable growth in revenue this quarter, especially from our telco sector offerings, underscores the effectiveness of our market-driven strategies. It also reflects the rising demand for our specialty poles for telco amid the roll out of the Jendela initiatives nationwide.

“Our team’s dedication to understanding and fulfilling customer needs has been a key driver in boosting our sales of both standard and specialty poles, contributing significantly to our overall financial performance,” Por said.

He added that the group remains committed to navigating the challenges in FY23 despite prevailing uncertainties in local and global economies. These challenges were worsened by volatility in the foreign exchange as well as intensifying competition from lower-quality products.

The group is concentrating on maintaining vigilant business practices and is actively diversifying its portfolio. One of the key parts of its diversification strategy includes venturing into the renewable energy (RE) sector, aiming to broaden the sources of revenue and establish more stable, recurring income streams, which is poised to become the company’s second growth engine.

The company’s recent achievement in securing a RM59.9 million contract for a large-scale solar project, escalating its RE segment’s order book value to RM71 million, exemplifies Mestron’s dedication to this venture.