DPS Resources Bhd (“DPS” or “Group” or “Company”) saw a strong recovery in the third quarter of its financial year ended 31 December 2020 (3QFY2021) as most business segments maintain their growth momentum.

Overall, the Group’s net profit was down by 57.14% year-on-year (YoY) to RM4.67 million in 3QFY2021 as compared to RM10.91 million in 3QFY2020. Excluding the other operating income of RM13.35 million in the previous year’s corresponding quarter, DPS would have seen a turnaround and a sharp increase in net profit.

Meanwhile, DPS revenue was up by 82.05% YoY to RM24.38 million in 3QFY2021 as compared to RM13.39 million recorded in the corresponding quarter a year ago. The main driver of growth for DPS is the property development and construction services business, supported by the robust property sales in the Group’s affordable home projects in Melaka. In 3QFY2021, DPS’s revenue was up by more than two times to RM19.45 million as compared to RM8.87 million recorded in the corresponding quarter a year ago. The property development and construction services posted a profit of RM4.12 million in 3QFY2021, which is about 51.8% higher than RM2.72 million achieved in 3QFY2020.

Group’s managing director, Edward Sow Yuen Seng, said, “We are proud of our achievement as we have managed to sustain our earnings growth despite the impact of the COVID-19 pandemic. The main driver of growth is our property development business, which has gained a lot of traction over the last few years. Our four projects in Melaka have an impressive take-up rate of more than 85%, and we are on track to complete it in 2021 and 2022.”

Aside from that, DPS’ furniture manufacturing and trading business continue to sustain its profit despite the challenges from the movement control order (MCO) and global lockdown that was imposed last year to contain the spread of COVID-19 infections. In 3QFY2021, the Group’s revenue for the furniture manufacturing business was down by 42.2% YoY to RM2.61 million as compared to RM4.52 million recorded in 3QFY2020. Meanwhile, the furniture manufacturing business segment profit saw a sharp decline of 88.9% YoY to RM933,000 as compared to RM8.47 million during the same period.

The sharp decline reflects the severe damage of the pandemic on the Group’s business segment but a turnaround was already seen in the previous quarter. In fact, on a QoQ basis, the furniture manufacturing business segment’s profit was more than doubled to RM885,000 in 3QFY2021 from RM371,000 in 2QFY2021.

Meanwhile, DPS’ rental of building with comprehensive services segment posted an increase of 78.13% in its revenue to RM2.32 million in 3QFY2021 as compared to 2QFY2021 while profit before tax (PBT) turn profitable at RM270,000.

According to Edward Sow, the Group’s strong performance across the three business segments is a testimony to the resilience of DPS amidst the COVID-19 pandemic. It also reflects the cost control that the Group has undertaken following the pandemic.

Looking forward, Edward Sow believes that property development and construction business services would continue to be the main earnings driver for the Group.

“We believe that the property development and construction business services will continue to play a key role in the Group’s overall earnings growth. We look forward to the rollout of a total of RM1 billion in gross development value (GDV) of development projects in Melaka, Seremban and Klang Valley over the next five years. Our focus will be on the affordable home projects as we intend to meet the supply-demand gap on this front,” Edward Sow added.

As for the Group’s furniture manufacturing business, Edward Sow said that the demand going forward is likely to pick up as seen by the rising book order. While the business segment was one of the hardest-hit sectors during the MCO and lockdown period, the recovery ahead with the global vaccination program would benefit this business segment as well.

DPS is expected to see a sharp recovery for the furniture manufacturing business amidst a pent-up demand for furniture. The furniture’s brand for DPS furniture manufacturing segment is Shantawood, which is a well-recognized international furniture brand. The pandemic has alleviated the demand for furniture as the “Stay-At-Home” culture has led to more spending on furniture that is of superior quality and brand.