CAB CAKARAN REPORTS RM38.38 MILLION NET PROFIT FOR Q1 FY2024
With cash of over RM200 million, CAB seeks to accelerate growth with strategic acquisitions
KUALA LUMPUR, 28 February 2024 — CAB Cakaran Corporation Berhad (“CAB” or “Group”), one of Malaysia’s largest food producers, reported a net profit of RM38.38 million for the fiscal quarter ended December 31, 2023(“Q1 FY2024”), an 8.3% decline from a year ago. Net profit declined mainly due to a lower year-on-year (“y-o-y”) gain on fair value adjustment of the Group’s biological assets, coupled with higher tax expenses.
During the quarter ended December 31, 2022 (“Q1 FY2023”), CAB had recorded an RM11.27 million gain in the fair value of its biological assets. This, coupled with an increase in the average selling price (ASP) of feed, processed chicken and other processed food products, had sent the Group’s net profit for Q1 FY2023 to RM41.87 million, the highest on record.
In Q1 FY2024, CAB recorded an RM1.59 million gain on fair value adjustment of the Group’s biological assets. Q1 FY2024 tax expenses were RM15.71 million, an increase of 41.9% from a year ago.
CAB’s Q1 FY2024 revenue dipped 1.6% y-o-y to RM548.48 million, dragged by a decline in the ASP for chicks and broilers. On a year-on-year basis, the average selling price of chicks and broilers fell 12.7% and 5.7%, respectively.
The Group’s financial position continued to improve, with CAB’s cash position rising 45.2% y-o-y to RM202.61 million as of December 31, 2023, up from RM139.58 million a year earlier.
Taking into account its latest results, CAB’s stock trades at a price-to-earnings (P/E) ratio of approximately 5.4x, compared to the peer average of 11.4x.
Mr. Christopher Chuah Hoon Phong, Group Managing Director of CAB Cakaran Corporation Berhad, said:
“We are pleased to kick off FY2024 with a strong quarterly performance. We will continue to pursue operational efficiency, economies of scale, and long-term sustainable growth opportunities.
In the near term, we expect to benefit from the recent shortages of pork and eggs, both staple foods for Malaysians. These shortages should sustain high demand for chicken meat, which supports the outlook for broiler prices.
We will continue to seek strategic mergers and acquisitions (M&A) opportunities to develop innovative products and create sustainable food solutions. With our strong cash position, we have the firepower to catalyze our evolution into a world-class food conglomerate.
On the expansion front, we continue to work towards launching Phase 1 of our venture in Indonesia with the Salim Group, our partner and shareholder. We have proven we can win in Malaysia, and have now set our eyes on replicating this model globally.
Our planned foray into Indonesia will not only diversify our revenue but also give us a new engine of growth. With the backing of Salim Group, one of Indonesia’s biggest conglomerates, we are confident that we have a long runway for growth in Indonesia.”
In the recent financial year ended September 30, 2023 (“FY2023”), CAB reported a record-high net profit of RM107.25 million — an increase of 85.8% from a year ago. The improved performance was driven by increased demand, higher selling prices, and lower production costs. FY2023 revenue was RM2.25 billion, a 14.9% y-o-y increase and the highest in the Group’s operating history.
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