PRG falls into the red in Q2

PETALING JAYA: PRG Holdings Bhd fell into the red in the second quarter ended June 30, with a net loss of RM1.78 million against a net profit of RM2.77 million a year ago.
Revenue for the period more than halved to RM26.61 million from RM59.96 million last year.
The decrease in both net profit and revenue was due to the decrease in revenue from manufacturing segment as a result of lower sales volume and also strengthening of the ringgit against the US Dollar, which is the major sales denomination currency, as well as decrease in revenue from Picasso Residence development project due to lesser units sold during the financial period.
The group anticipates the prospect of its manufacturing business to continue to be challenging in the near future and foresees challenges from the recent crude oil price surge which will increase the price of certain crude-oil based raw materials, in turn, leaving an impact on the gross profit margin.
It added that any further, significant and abrupt movement in the exchange rate between the ringgit and the Greenback may result in foreign exchange gains or losses which may affect the group’s results as it derives a significant amount of its revenue in US Dollar.
PRG’s board of directors said it will continues to focus on marketing and sale of the Picasso Residence units and is strengthening its presence in the property development market by venturing into affordable housing with strategic partners.
“The group is venturing into healthcare business as part of the Group's vertical integration along the value chain in the wellness segment of the healthcare industry which is thriving and has an opportunity for growth. The investments into healthcare business are expected to diversify the stream of income of the Group and compensate for business cycle fluctuations,” it added.
As for the cumulative period of six months, it reported a net loss of RM972,000 as opposed to a net profit of RM3.90 million.
Revenue declined to RM73.84 million from RM94.50 million.
In a separate filing, PRG said it was providing financial assistance to facilitate the ordinary course of business of its non-wholly owned subsidiary, Premier De Muara Sdn Bhd.
The financial assistance amounting to RM3 million, was in the form of a letter of undertaking to suppliers.