Pecca’s breaks record, nine-month net profit surpasses that in whole of FY23

PETALING JAYA: Automotive upholstery maker Pecca Group Bhd is on track to deliver record-breaking full-year earnings again.

Within just nine months of fiscal year 2024 (FY24), the group has surpassed its total net profit in FY23. The nine-month period not only saw a stronger net profit margin, but also an increase in Pecca’s cash holding, which crossed RM140 million for the first time, mostly due to operating activities.

Pecca reported a net profit of RM40.5 million in the nine months ended March 31, 2024 (9M’24), largely attributed to higher margin sales and stronger topline contribution from Malaysia and other Asian markets. This represents a 59.8% year-on-year (y-o-y) jump or an increase of RM15.1 million.

Meanwhile, revenue increased by RM21.4 million or 12.8% y-o-y to RM188.3 million in 9M’24. The rise was led by increased sales from the original equipment manufacturer (OEM) car seat cover sub-segment, which rose by 20.4% y-o-y to RM150.3 million in 9M’24.

Notably, revenue from the sewing of fabric car seat covers increased by 29.1% y-o-y to RM9.6 million, while revenue from the manufacturing of leather/PVC car accessories covers increased by nearly 19.8% y-o-y to RM5.9 million. As a result of the improved overall profitability, Pecca’s net profit margin in 9M’24 grew to 21.5%.

For the third quarter ended March 31, 2024 (Q3’24), Pecca reported a record-breaking net profit of RM14 million, up by 63.9% y-o-y. Meanwhile, revenue rose 1.6% y-o-y to RM59.5 million.

The improvements were mainly attributable to higher sales volume and better production cost efficiency achieved in the automotive segment. The OEM leather car seat sub-segment contributed about 88.8% of the total revenue for car seat covers. Revenue generated from the healthcare business was consistent at RM0.82 million compared with the preceding year’s corresponding quarter.

Pecca CEO Foo Ken Nee said, “With vehicle sales in Malaysia forecast to exceed 700,000 units in 2024 for the third straight year, this puts Pecca in a strong position to benefit from increased car seat cover sales. Within the replacement equipment manufacturer (REM) sub-segment, we're working hard to secure more customers by expanding into new markets such as the United States, Australia, New Zealand, Singapore, and Europe. This year, we intend to make key product launches and ramp up our marketing and brand-building activities.”

He added that they continue to make progress on their second plant at the UMW High Value Manufacturing Park in Serendah, Selangor.

“After this new plant comes online sometime in 2025, it will double our production capacity, enabling us to meet demand from both existing and new customers, including those from our Aviation segment,” he said.

Meanwhile, Pecca executive director Teoh Zi Yi said, “At this stage, we are focused on building a strong customer base in the aviation market, with the help of our two partners, Global Component Asia Sdn Bhd and Aero Cabin Solutions (ACS). In the first quarter of 2024, as part of our collaboration with ACS, we achieved a milestone with our first purchase order to service a 180-seat, Europe-registered Airbus A320 passenger aircraft. Pecca Aviation is in the final stage of completing the product development activity prior to mass production, a critical step before the signing of definitive agreements with ACS.”

In the coming quarters, Pecca aims to maintain its growth momentum as the group continues to expand into new markets across four key pillars, namely, OEM, REM, aviation, new business and electric vehicle-related businesses.