ZK International Group Announces 405% Gross Profit Increase for the Fiscal Year 2024

Core Viewpoint - ZK International Group Co., Ltd. has reported a significant improvement in its financial performance for the fiscal year ended September 30, 2024, with a 405% increase in gross profit and a 95.44% reduction in net loss, indicating a positive turnaround for the company [1][15]. Financial Highlights - Revenue for the fiscal year 2024 was $108.20 million, a decrease of 3.05% from $111.60 million in 2023 [2]. - Gross profit increased to $6.55 million from $1.30 million, marking a 405.02% increase [2]. - Gross margin improved to 6.5% from 1.16%, an increase of 4.89 percentage points [2]. - Loss from operations decreased to $1.72 million from $60.44 million, a reduction of 97.16% [2][9]. - Net loss attributable to ZK International was $2.78 million, compared to $61.06 million in the previous year, resulting in a loss per share of $0.08 versus $1.94 [2][13]. - Net book value per share increased to $0.82 from $0.80 [2][14]. Revenue Analysis - The decrease in revenue was primarily due to increased competition and loss of price-sensitive customers after raising the average selling price (ASP) in response to rising raw material costs [3][4]. - The recovery in the real estate market during fiscal year 2024 contributed to increased demand, contrasting with the downturn experienced in 2023 [3]. - The company anticipates a gross profit margin of 10% to 12% for the fiscal year 2025, driven by further increases in ASP and public sector investments [5][7]. Gross Profit Insights - The substantial increase in gross profit was attributed to a rise in the weighted average selling price, despite pressures from rising production costs [6]. - Gross profit margin for the year ended September 30, 2024, was 6.05%, up from 1.16% in the previous year [6]. Operational Loss Reduction - The significant decrease in operational loss was mainly due to improved gross margin performance and reduced one-off asset impairment costs incurred in the previous fiscal year [9]. - The company recorded a substantial asset impairment cost of $53.20 million in fiscal year 2023, primarily related to its investment in CG Malta and associated software platforms [10][11]. Strategic Outlook - The Chairman of ZK International expressed optimism about the company's future, highlighting the improved business climate and the potential for significant growth in profit margins and net profit [15]. - The company is focused on expanding its market share and enhancing operational strategies to capitalize on the recovering market conditions [15].