Imaspro’s dividend poser
IMASPRO Corp Bhd, a company which produces pesticides, plant micronutrients and distributes other agrochemicals, has seen its profitability on the decline in the last five years. For the financial year ended June 30, 2019 (FY19), it reported a net profit of RM577,000, a significant drop from the Rm5.73mil recorded in the previous year. This is a substantial decline from the net profit of Rm10mil made in FY15, a chart in the company’s recently released 2018 annual report shows.
Correspondingly, earnings per share (EPS) has come down from 12.5 sen five years ago to a mere 0.7 sen in FY19.
The company attributed its poor performance to the continued pressure seen in crude palm oil prices, which in turn has implications on it as a manufacturer of agricultural chemicals. Its profit margins also continue to be squeezed, as global players aggressively fight for market share. The company added that both its domestic and export markets are exposed to aggressive price pressures that had led to margin compression.
Interestingly, Imaspro has continued to pay a gross dividend of 3.5 sen in the last five years. Can the company keep paying this amount with profitability on the downtrend?
However, in its management discussion and analysis, the company sees opportunity in the growing demand for durians outside the country.
This comes following the recent Malaysian government initiative that provided the green light to export whole fruits for durians in frozen packs.
“Given that the quality of fruits for export is of fundamental importance and a basic requirement under the export standards, the use of insecticides for prevention is absolutely necessary and inevitable,” it says in the annual report.
The company says it is well prepared for this and has ready products that can cater to the anticipated surge in market demand for whole durian fruits in the future. Whether this will reverse its fortunes, the coming quarters will show.
Its shares traded unchanged yesterday at RM2.17 – down about 5% year-to-date.
At this level, its market cap stood at Rm173mil.