Koda Ltd 1H2026 Financial Results: Strong Growth Amid Market Shifts

Koda Ltd, a Singapore-based Original Design Manufacturer and exporter of wood furniture and fixtures, has released its unaudited condensed interim financial statements for the six months ended 31 December 2025 (1H2026). The report reveals significant year-over-year improvements in profitability, driven by operational efficiency and robust export demand, particularly from the US and Europe. Below, we break down the key financial metrics, performance drivers, and outlook for investors.

Key Financial Metrics and Performance Table

Historical Performance Trends

• Revenue Growth: Revenue increased by 6.8% YoY, primarily due to higher export sales in the US and Europe. This offset a US\$0.55 million decline in Asia-Pacific sales, reflecting continued weak domestic consumption in China.
• Gross Margin Expansion: Gross margin rose by 2.0 percentage points to 31.7%, attributed to improved factory efficiency and higher utilization rates, resulting in lower unit production costs.
• Profitability Surge: Net profit attributable to shareholders more than doubled to US\$1.17 million, supported by operational improvements and effective cost management.

Exceptional Items and Unusual Trends

• Selling and Distribution Costs: Increased by 9% YoY to US\$4.13 million, mainly driven by higher sales and agent commissions in line with increased revenue. This was partially offset by lower depreciation of right-of-use assets.
• Trade Receivables Spike: Rose by US\$3.4 million, with turnover days stretching from 51 to 67 due to extended credit terms for US export customers. Subsequent collections of US\$5.7 million post-period-end mitigate near-term risk.
• Cash Flow: Net cash used in operations was US\$0.56 million, impacted by working capital outflows, despite a strong operating profit before working capital changes. Financing activities generated US\$0.5 million, mainly from new bank borrowings offsetting repayments.

Balance Sheet & Capital Structure

• Total Assets: Increased to US\$74.5 million from US\$71.6 million, primarily due to higher receivables and inventory purchases to support increased sales.
• Shareholders’ Equity: Rose by US\$1.4 million to US\$47.5 million, reflecting retained profits and positive foreign currency translation reserves.
• Leverage: Bank borrowings increased by US\$1.3 million to US\$3.9 million, mainly to fund working capital for higher export sales.

Dividend Policy

• No interim dividends were declared for 1H2026 or the comparable period last year.

Related-Party Transactions and Unusual Fund Flows

• The only disclosed interested person transaction (IPT) was a rental expense of S\$46,000 for a land lease with Zenith Heights Sdn Bhd, related to two directors. This IPT was approximately 0.08% of the Group’s net tangible assets, indicating immaterial impact on financials.

Chairman’s Statement

“Revenues increased by US\$1.9 million to US\$29.6 million in 1H2026, primarily due to higher export sales to both the US and Europe markets whereas export sales to the Asia-Pacific and other regions fell by US\$0.55 million as domestic consumption in China remained weak. Gross profit rose by US\$1.1 million to US\$9.4 million on the back of higher revenue and gross margin. Gross margin rose by 2.0 percentage point to 31.7% as a result of improved factory efficiency and higher utilisation rates, thereby resulting in lower unit production cost.”

Tone: Positive, with emphasis on operational improvements, strong export demand, and prudent cost management. The Chairman also notes macro challenges such as trade policy uncertainty and currency fluctuations.

Outlook and Forward Guidance

• The Group expects continued profitability in 2H2026, supported by a healthy order backlog and improved operational efficiencies.
• Risks cited include ongoing macroeconomic uncertainties, trade policy shifts, and currency volatility, but management expresses confidence in sustained margin improvement if current trends persist.

Conclusion and Investment Recommendation

Overall, Koda Ltd demonstrates strong financial performance, marked by substantial profit growth, improved margins, and a resilient export-driven business model. The absence of dividends and increased working capital requirements are notable, but these reflect growth investment rather than operational weakness.

• If you are currently holding this stock: The outlook is positive, with the company benefiting from global supply chain shifts and factory efficiency improvements. Existing shareholders may consider holding to participate in further upside, especially as the Group expects continued profitability and has a strong balance sheet. However, monitor trade policy risks and receivables collection closely.
• If you are not currently holding this stock: The strong YoY growth, margin recovery, and positive outlook make Koda Ltd an attractive watchlist candidate for investors seeking exposure to export-oriented manufacturers. Consider initiating a position if the company sustains its order momentum and working capital management remains robust.

Disclaimer: This analysis is based solely on information disclosed in Koda Ltd’s 1H2026 interim financial report. It does not constitute financial advice or a recommendation to buy or sell securities. Investors should consider their own investment objectives and risk tolerance before making investment decisions.

View Koda Historical chart here