Scientex reaches new record in quarterly earnings
KUCHING: Global packaging manufacturer and leading property developer Scientex Bhd (Scientex) reached a new record in quarterly performance in the third quarter ended April 30, 2017 (3Q17) with 8.6 per cent increase in net profit to RM66.5 million and 17.0 per cent gain in revenue to RM636.2 million.
The stronger performance was mainly attributed to stronger exports in the group’s manufacturing segment and higher progress billings for ongoing property development projects, it said in a statement.
Managing director Lim Peng Jin said Scientex’s consumer packaging reported growth in adoption from export customers, especially for cast-polypropylene (CPP) and biaxially-oriented polypropylene (BOPP) films which started in early and end-2016 respectively.
“Meanwhile, the ongoing expansion at our consumer packaging plant in Ipoh to double up annual capacity to 24,000 metric tonnes is expected to complete by August 2017,” he said in the statement.
“The increased capacity, particularly for form-fill-seal (FFS) bags, hygiene bags, and label films, would allow for additional growth in our consumer packaging division.
“Additionally, our new stretch film plant in Arizona, US, is seeing good progress in factory renovations. We have also acquired five stretch film rewinders that are set to commence in October 2017, and two cast film production lines to be installed in December 2017 and early-2018 respectively.
“Furthermore, our property development segment continues to achieve commendable sales, with average take-up rate above 75 per cent across ongoing projects as at 3Q17.
“As a recognised leader in affordable developments, we will continue to focus on bringing reasonably priced and quality houses to the masses, and look forward to consistently growing our property division.”
Approximately 70 per cent of total 3Q17 revenue was derived from the manufacturing segment with RM442.8 million, which rose 15.7 per cent from RM382.8 million previously. The boost was led by exports of industrial and consumer packaging. Exports made up 75.9 per cent of manufacturing segment revenue in 3Q17, compared to 72.4 per cent in 3Q16.
The group’s property segment contributed the remaining RM193.4 million to 3Q17 revenue, growing 20.0 per cent from RM161.1 million a year ago on higher progress billings for ongoing development projects in Johor, Melaka and Ipoh.
Cumulatively, revenue for the nine months ended 30 April 2017 (9M17) amounted to RM1.8 billion, increasing 7.1 per cent from RM1.6 billion previously. However, the group posted a marginal decline in net profit to RM183.7 million from RM186.7 million a year ago, in line with the Group’s market penetration strategy.
Scientex declared an interim dividend of 6 sen per share in respect of FY2017, with ex-date on 5 July 2017 and payable on 21 July 2017. The estimated payout would stand at RM29.0 million or 15.8 per cent of 9M17 net profit. The group has a dividend policy to distribute at least 30.0 per cent of net profit to shareholders.
Commenting on future prospects, Lim was pleased that the expansion plans for the consumer packaging segment are en route for completion by end-2017, enabling them to focus on maximising its capacity in the near term.
“Meanwhile, we continue to replenish our landbank, and have recently completed the acquisition of 197.4 acres of land in Melaka,” he said. “We also expect to complete the purchase of another 121.2 acres of land situated in Senai, Johor in the second half of 2017.
“With demand for affordable homes on the rise, we would strive to launch more projects going forward to capture a larger share of the market.”