Spritzer Berhad (Spritzer) has reported a significant boost in its core earnings for the first half of FY24, surpassing expectations with an impressive 86% year-on-year increase. The company's core PATANCI for the period reached RM35.6 million, reflecting a solid performance that constitutes 66% of the full-year forecast and 71% of consensus estimates. The increase in earnings was driven by higher sales volumes, improved average selling prices, and lower raw material costs.
MIDF Stock Broking House have maintained a NEUTRAL rating on Spritzer, but have revised their target price upwards to RM2.78 from RM2.55. The revision follows the stronger-than-expected earnings performance and aligns with a revised earnings forecast for FY24-25F, which has been increased by 15% and 9% respectively. This adjustment reflects the company's improved financial metrics and sustained performance despite broader market uncertainties.
For the period under review, Spritzer's revenue rose by 20.8% year-on-year to RM281.6 million, driven by increased sales of bottled water. Core PATANCI also saw a quarterly growth of 32.4%, reaching RM20.3 million, supported by an uptick in revenue to RM146.6 million. The growth in revenue and earnings was attributed to the stronger performance of the manufacturing segment and favourable cost dynamics.
Looking ahead, Spritzer is expected to benefit from ongoing high demand for bottled water, supported by rising household spending, a boost in tourism, and enhanced export activities. Additionally, stable Brent crude oil prices and strong GDP growth in the latter half of the year are anticipated to support the company's operational efficiency and expansion efforts.