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9 Quick Things Investors Should Know About Yoma Strategic Holdings Ltd’s Latest Earnings Update

Last week, Yoma Strategic Holdings Ltd (SGX: Z59) released its fourth quarter and full year earnings update for its fiscal year ending 31 March 2018 (FY2018). As a quick introduction, Yoma Strategic is a conglomerate that focuses on Myanmar. It has business interests in a wide variety of sectors in the country, such as real estate development, agriculture, tourism, vehicle distribution, and food and beverage retail.

Here are nine things investors should know about Yoma Strategic’s latest results:

1. Revenue for the reporting quarter was down 48.2% year-on-year to S$25.1 million.

2. Gross profit declined even more by 57.0% to S$7.9 million compared to a year ago, mainly due to the lower revenue, and a higher proportion of revenue from the Automotive & Heavy Equipment segment, which has a lower gross profit margin profile compared to the Real Estate segment.

3. Net profit attributable to shareholders plunged by 85.5% year-on-year to S$3.5 million mainly due to the lower revenue, lower other income, and higher administrative costs.

4. During the reporting quarter, Yoma Strategic generated S$1.7 million in operating cash flow, down from S$13.3 million seen a year ago.

5. As of 31 March 2018, Yoma Strategic had S$33.4 million in cash and S$243.5 million in debt.

6. Revenue from the Automotive & Heavy Equipment business decreased by 19.7% year-on-year to S$10.6 million in the reporting quarter, mainly due to the absence of the delivery of tractors under the Ministry of Agriculture and Irrigation’s nationwide mechanisation program that occurred in the fourth quarter of FY2017.

7. The addition of new stores resulted in revenue from the conglomerate’s KFC restaurant business (this falls under the Consumer category) jumping by 35.7% year-on-year to S$3.95 million. Yoma Strategic has 22 KFC stores as at 31 March 2018.

8. Revenue from Yoma Strategic’s real estate-related businesses declined by 67.5% year-on-year to S$10.5 million mainly due to a slowdown in real estate sales.

9. Melvyn Pun, Yoma Strategic’s chief executive officer, shared the following comments in the conglomerate’s latest earnings update:

“Our diversification strategy has proven to be sound, with revenue growth in our Non-Real Estate businesses offsetting the slowdown in the real estate market.

We are seeing good opportunities in the Consumer and Financial Services sectors and are very optimistic on their growth prospects in the coming years. Most recently, our investment in Wave Money, which has a network of more than 23,000 agents nationwide, will allow us to tap into the large unbanked population, particularly in communities outside of Yangon.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.