Leon Fuat Posts RM928.05 Million in Revenue for FY2023, with Improved PBT Climbing to RM39.76 Million

Group’s Strategic Efficiency Leads to Profit Growth Amidst Revenue Challenges Fluctuations

SHAH ALAM, 28 FEBURARY 2024 – LEON FUAT BERHAD (“Leon Fuat” or the “Group”), a manufacturer and trader of steel products specialising in rolled long and flat steel, today unveiled the Group’s financial performance for the fourth quarter ended 31 December 2023 (“Q4FY2023”), reflecting a steadfast focus on profitability despite a slight change in revenue compared to the corresponding quarter of the preceding financial year (“Q4FY2022”).

On a full year basis, Leon Fuat observed a 9.5% decrease in revenue year-on-year, amounting to RM928.05 million for the 12 months ended 31 December 2023 (“FY2023”), down from RM1.03 billion. This decline was predominantly due to lower revenue from both trading and processing segments of steel products, which decreased by 11.0% and 8.6% respectively.

Despite the slight dip in revenue, Leon Fuat, with the Group’s strong underlying fundamental strength, showcased a remarkable improvement in financial health with a gross profit ascendancy of 9.1% to RM99.59 million for the financial year-to-date, up from RM91.26 million. This uplift was largely attributed to a refined overall gross profit margin, which saw an increase from 10.2% to 11.0%, coupled with a significant reduction in inventories written down.

Profit before tax (“PBT”) for Leon Fuat also experienced a positive shift, marking a 7.7% increase to RM39.76 million for the financial year-to-date, compared to RM36.91 million in the preceding financial year.

In comparison with the immediate preceding quarter (“Q3FY2023”), Leon Fuat's revenue in Q4FY2023 increased by 1.8% to RM240.57 million, primarily driven by stronger trading activities in steel products. This period also saw a significant rise in gross profit by 28.4% to RM23.26 million, buoyed by an improved gross profit margin of 10.7%, though this was somewhat offset by inventory adjustments. Notably, profit before tax (“PBT”) for the current quarter reached RM6.81 million, marking a substantial 70.9% increase from RM3.99 million in Q3FY2023, underscoring the Group's successful strategies in boosting profitability.

Calvin Ooi Shang How, Executive Director of Leon Fuat said, “Our financial results for Q4FY2023 and the entire fiscal year underscore Leon Fuat's resilience and strategic adaptability in a fluctuating market landscape. The notable increase in our profit margins, despite revenue pressures, highlights our commitment to operational efficiency and financial prudence. As we continue to navigate through the challenges, our focus remains steadfast on enhancing shareholder value and fortifying our market position through strategic growth initiatives capabilities and market reach. We remain optimistic about our long-term prospects and continue to focus on delivering shareholder value through sustainable and strategic business practices.”

As at 28 February 2024, the share price of Leon Fuat is RM0.545, representing a market capitalisation of RM185.8 million.