SINGAPORE (May 28): Samurai 2K Aerosol, the aerosol coating specialist of automotive refinishing, reported FY18 earnings surged fivefold to RM11.7 million ($3.9 million) from RM2.2 million a year ago.

Revenue for FY18 more than doubled to RM90 million from a year ago mainly due to a RM29.65 million increase in revenue from its standard paint segment and a RM20.70 million increase in revenue from its premium paint segment.

Sales volume increased by 9.02 million cans or 132.6% to 15.8 million cans as a result of enhanced marketing initiatives taken such as advertisements on social media, exhibition, demonstration and training activities for potential end-users.

FY18 gross profit increased by 117.7% to RM38.7 million while gross profit margin fell to 43.0% from 45.1% a year ago. The slight drop in the gross profit margin was mainly due to the 3.2% appreciation of the ringgit against the Indonesian rupiah which lowered its export selling prices to Indonesia.

Included in the cost of sales was the depreciation of property, plant and equipment of RM0.83 million, which had increased by RM0.29 million, or 53.1%, mainly due to the acquisition of plant and machineries amounting to RM6.41 million for expansion purpose.

The company also incurred a loss on foreign exchange of RM4.11 million in FY18 compared to a gain on foreign exchange of RM0.67 million in FY17.

Marketing and distribution expenses increased by RM3.73 million or 107.2%, mainly due to RM0.63 million higher salaries and commission paid to sales team and RM 3.10 million increase in marketing cost.

Looking ahead, Samurai 2K Aerosol expects the operating environment to be challenging for the next 12 months given that geopolitical uncertainty that could adversely impact global trade. However, the company has identified the US as the next growth engine.

Shares in Samurai 2K Aerosol closed 5 cents higher at $1.75 on Monday.