MALEE and the Even More Bitter Fruit Juice
Can MALEE make a comeback after this much loss while facing the crisis from its fruit juice business, which is its core business?
It is hard to believe that a good basic structure company like Malee Group Public Company Limited (MALEE), who used to announce its financial statement with constant growth and profits, is stumbling with continuous losses.
The latest financial statement was the 3Q statement that reported ฿124.03 million YoY, compared to a gain of ฿77.62 million YoY. The causes of the highest loss in 10 years were due to:
- The decrease in sales.
- Increase in cost per profit from lower production capacity.
- Higher Depreciation.
- The increase of 2017 excise tax.
- Sales compensation for branded products.
- Higher selling expenses from multiple new product launches.
- Higher R&D expense.
- Higher audit fees and consultant fees from new business establishments.
- Higher finance costs due to higher borrowings as a result of previous investments in machinery, subsidiaries, and joint ventures.
The 9M18 financial statement from MALEE reported that the company faced a loss of ฿129.44 million when compared to the same period of last year that MALEE earned ฿257.47 million of profit.
Is this a dark age of MALEE since its business growth has decelerated faster than expected, including the slower income from multiple new products and brands than MALEE had anticipated, while costs have been hiking from the aforementioned reasons?
After reviewing the analysis from MALEE, the company still tends to be constantly pressured for the rest of the year. According to MALEE, a loss in 4Q18 is expected.
MALEE’s profit started to plunge since 2Q17 after recording 61.35 million of profit, decreased ฿81.22 million YoY. In 3Q17, the company earned ฿77.60 million of profit, fell 83.41 million YoY. Which caused the 2017 profit to stumble from ฿530.02 million in 2016 to only ฿285.58 million.
The profit in 1Q18 was ฿9.46 million, lowered ฿118.50 million YoY. Then MALEE turned to face a loss in 2Q18 with ฿14.87 million of loss, and ฿129.44 million of loss in 3Q18.
If MALEE’s businesses keep on making new lows, at a certain point, it will be too late for a turnaround.