SINGAPORE - Mainboard-listed Yoma Strategic Holdings announced on Monday a 77.7 per cent jump in net profit to $2.56 million for the first quarter ended June 30, 2015, from $1.44 million in the year-ago period, as growth in its automotive sales and property rental income more than offset a decline in sales of residences and land development rights.
Revenue rose 31 per cent to $22.6 million, as its automotive segment was bolstered significantly by contribution from the newly-acquired Convenience Prosperity Company, which sells tractors and farm equipment in Myanmar.
The group's property leasing portfolio continued to enjoy healthy demand from a growing number of expatriates, Yoma said. As at the quarter's end, rental income accounted for approximately 11 per cent of group revenue.
But Yoma's share of losses from joint ventures almost quadrupled to $249,000, from $65,000, mainly due to the recognition of share of currency translation loss.
This was more than offset by its $348,000 share of profits from associated companies, from zero a year ago. This was mainly thanks to its 25 per cent stake in telecommunication towers firm Digicel Asian Holdings and a 30 per cent interest in beverage producer and distributor Access Myanmar Distribution Co.
Said Mr Melvyn Pun, Yoma's CEO designate: "We are pleased to see steady revenue growth from real estate rental and non-real estate segments and expect the trend to continue. The group is also expecting a strong demand from the growing consumer market with the launch of its first KFC store in Yangon."
Mr Serge Pun, Yoma's executive chairman said the group intends to open additional KFC stores in Yangon before the end of the year and expects it to be a significant revenue contributor as we ramp up the number of stores throughout the country over the years to come.
He added, "Our automotive business, in particular our Yoma Fleet business, will continue to see strong growth supported by incoming MNCs setting up operations in Myanmar. This is in line with our 2020 vision to build our non-real estate businesses to match our real estate operations."
With six foreign bank branches having opened in Yangon, Yoma said it may work with local and foreign banks to secure financing for itself and its customers, particularly for the real estate business.
Mr Pun said, "At the right opportunities, we intend to further utilise the debt markets which includes the Asian Development Bank's US$100 million loan's facility which we have yet to draw down to fund our business expansion."
The firm also noted that Myanmar's current account deficit is expected to widen beyond 7 per cent in 2015/2016, and that the kyat has come under pressure recently.
"Nonetheless, healthy regional demand for Myanmar's natural gas, rising tourism revenue and accelerating FDI will likely help mitigate any significant balance of payment issues," it said. "The group is keeping a close eye on the currency volatility and mitigating our currency exposure where possible."