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

Credit: Daniel Julie

Yesterday, Yoma Strategic Holdings Ltd (SGX: Z59) released its second quarter earnings update for its fiscal year ending 31 March 2019 (FY2019). 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, vehicle distribution, and food and beverage retail.

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

1. Revenue for the reporting quarter was up by 26.5% year-on-year to S$41.9 million.

2. Yet, gross profit declined by 0.6% to S$14.7 million as compared to a year ago.

3. Net profit attributable to shareholders surged 611.0% year-on-year to S$26.2 million mainly due to fair value gain in investment properties of S$58.5 million.

4. During the reporting quarter, Yoma Strategic generated S$46.2 million in operating cash flow, up from S$26.4 million in the same period last year.

5. As of 30 September 2018, the group had S$32.6 million in cash and S$313.3 million in debt. Its gearing ratio stood at 23.8% at the end of quarter.

6. Real estate related business grew from S$14.9 million to S$27.24 million mainly due to higher property sales, offset slightly by lower property service income.

7. The addition of new stores and same-store sales growth resulted in revenue from the conglomerate’s KFC restaurant business (this falls under the Yoma F&B) going up by 40.5% year-on-year to S$4.6 million. The increase was due to a higher number of stores in the latest quarter. Same-store sales growth of 6% and same-store transactions growth of 9% for stores opened for at least 12 months also contributed to the higher revenue.

8. Revenue of Yoma Motors recorded a 40.7% year-on-year decline to S$7.7 million mainly due to “the effect of the strong monsoon at the beginning of the quarter in certain parts of Myanmar that affected farmers and caused delays in delivering the second 500-tractor order secured under the Ministry of Agriculture and Irrigation’s nationwide mechanisation programme.”

9. Revenue generated from the Financial Services business (mainly from Yoma’s fleet leasing business) grew by 22.2% year-on-year to S$2.09 million. Its fleet size increased to 919 vehicles and its total assets stood at S$36.8 million, as of 30 September 2018.

10. Melvyn Pun, chief executive of Yoma Strategic, commented:

“I’m encouraged by the turnaround in real estate. In particular, the overwhelmingly positive response for City Loft, our new mass market housing offering, provides a springboard for a very important line of business that has huge potential to solve the housing shortage in Yangon. Meanwhile, Wave Money is building on its leadership position in mobile financial services in Myanmar, reached its cash-flow breakeven point and expanded its agent network to 34,000 locations in this quarter. Elsewhere, the Consumer business has been growing rapidly, with KFC enjoying same store sales growth and a successful expansion outside of Myanmar’s two major cities, Little Sheep’s upcoming launch and the addition of Auntie Anne’s to our F&B franchise portfolio.”

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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.