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Let me just reason it out. A loss of RM0.260mil is mainly due to a decrease in revenue due to a shorter business operation period and a written-off goodwill. From the previous QR, goodwill recorded in the Balance Sheet is RM1.059mil while the current QR, it is RM0.365mil, meaning to say, RM0.694mil got written-off. (If you happened to search for the usual goodwill impairment from older QR, you can see how the impairment is done. Well, I got no idea also how this goodwill is generated at first, so I don't want to comment much on impairing/write off, let's just take it as RM0.694mil got written off.)
So I can roughly add the amount back to get my operating profit when there's no write off for goodwill.
RM0.210mil + RM0.694mil = RM0.904mil from revenue of RM8.476mil (margin is 10.67%)
Compare with last year, RM1.328mil operating profit from revenue of RM9.383mil (margin is 14.15%)
Clearly margin has dropped in the current quarter ended May 2020 as compared to the quarter ended May 2019.
Anyway if you look at page 4 of the QR, table B1: Review of Performance, the company failed to realize they did a mistake in the representation of data. The second and third columns should refer to 3 months instead of 12 months. This issue happened a few times in the previous QR release also if anyone happened to realize.
If we compare the full financial year 2019 (margin: 7.1%) and 2020 (margin: 11.9%), the lower margin in 2019 is mainly due to higher employment cost and an increase in operating costs (LPG and raw material price). But does it justified to have share price around RM0.20 last year but RM0.645 now with this result? (Maybe on a good prospect under the current pandemic, but I don't know and I got no comment.)
u missed that during mco, there s no operation but sunk cost such as salary, rental, maintenance, etc still apply. hence, can't really compare purely based on profit margin. should provide some adjustment due to shorter period of operation,let s say 4 weeks if I'm not mistaken for the gov to decide to allow other supply chain and essential support services to operate. so out of 3 months, esceramic only can operate for 2 months. within these two months, it made 8.476 millions revenue.
Yes, margin will definitely be lower for the quarter, that is for sure due to short operation period. You could reason it deeper, cost of goods sold is around 80% of revenue anyway, you can then use the available administration, selling and distribution expenses as proxy (or even inflate it with says 10-20% since it is expected to incur additional expenses like employee welfare) to get the expected profit, see if there a gap versus reported. Anyway, margin for year 2020 is still reasonable.
