Scientex expects consumer packaging exports to drive growth
KUCHING: Scientex Bhd (Scientex) is expecting its growth in the financial year ending July 31, 2017 (FY17) to be driven by exports of its enlarged consumer packaging business.
As at end-December 2016, the group had completed expansions in biaxially-oriented polypropylene (BOPP) film manufacturing and setup of its new cast-polypropylene (CPP) film plant.
The enlarged capacity helped Scientex achieve its best quarterly performance in its corporate history in the second quarter ended January 31, 2017 (2Q17), with revenue and net profit of RM586.25 million and RM65.19 million respectively.
For comparison, the group achieved revenue and net profit of RM545.43 million and RM64.62 million respectively in the corresponding quarter a year ago.
“Our new BOPP and CPP film manufacturing plants are seeing encouraging progress with growing sales to both local and export markets. We look forward to ramping up production in subsequent quarters, as we complete various qualification process with existing partners as well as secure new customers going forward.
“We are also on track to complete the expansions of our polyethylene (PE) film manufacturing plants in the second half of 2017. Our PE film manufacturing capacity has now increased to 72,000 metric tonnes per annum (MT pa) from 60,000 MT pa, and would reach a total of 84,000 MT pa. upon completion. This provides us the additional production capacity to sustain long term growth.
“Meanwhile, Scientex’s property development segment continues to perform positively on the back of resilient demand for affordable properties. We have recently extended our footprint to Northern Malaysia with the launch of two new projects in Ipoh which saw encouraging sales and would strengthen our prospects going forward,” managing director Lim Peng Jin said.
Scientex’s manufacturing segment made up RM411.91 million of 2Q17 revenue, growing 2.5 per cent from RM401.99 million previously, attributed to stronger contribution from the new BOPP and CPP film manufacturing plants.
Meanwhile, the group’s property segment contributed RM174.34 million to 2Q17 revenue, growing 21.5 per cent from RM143.44 million a year ago on stable sales of ongoing projects and new launches in the group’s developments.
Cumulatively, revenue for the first half ended January 31, 2017 (1H17) amounted to RM1.12 billion, increasing 2.3 per cent from RM1.1 billion previously. The group’s 1H17 net profit stood at RM117.25 million, 6.6 per cent lower from RM125.48 million previously, due to lower contribution from the manufacturing segment.
Commenting on the group’s performance and future prospects, Lim said that coming off from a subdued 1Q17 on weaker prospects in domestic and export markets, Scientex’s manufacturing segment has noted a promising uptick in production volume in 2Q17, led by increasing sales of consumer packaging films.
“This was largely attributed to the progress of our CPP and BOPP film plants, which are steadily securing new businesses.
“Going forward, we strive to increase sales of flexible packaging across our manufacturing business, through larger orders from existing customers, as well as securing new customers”.
“Coupled with our exposure to the affordable properties segment which is anticipated to be resilient, we are confident of prospects for the rest of FY17,” he added.