Daibochi posts net profit of Rm10.83mil in Q3

Company is investing Rm60mil in capacity expansion

PETALING JAYA: Flexible packaging manufacturer Daibochi Bhd has recorded a net profit of Rm10.83mil on the back of Rm151.98mil in revenue for its third quarter ended April 30. There were no comparable figures as the company had changed its financial year-end.

The company is in the midst of changing its financial year-end from Dec 31 to July 31 to coincide with the financial year-end of its holding company, Scientex Bhd.

Therefore, these unaudited condensed consolidated financial statements are for a period of nine months from Aug 1, 2019 to April 30, 2020, being the third quarter of the financial year ending July 31, 2020 (FY20).

For the nine-month period, Daibochi’s net profit was Rm36.45mil on the back of Rm463.5mil in revenue.

The group has declared an interim dividend of two sen in respect of FY20, with the ex-date on July 6, and payable on July 17. The dividend payout of Rm6.5mil represents 18% of its net profit for the nine months to FY20.

Daibochi is investing Rm60mil in capacity expansion in line with its long-term growth strategy on the back of a resilient business performance and outlook.

In a statement, Daibochi said its capital expenditure would enhance its capabilities and service to its customers, and involve the purchase of 13 new lines for its printing, lamination, and bagging processes, which are expected to come on stream over the next six months.

Separately, the group is considering plans to purchase eight more lines, while maintaining group net gearing below 0.5 times. As at April 30, group net gearing stood at 0.23 times.

“Daibochi’s resilient performance was buoyed largely by sustained orders for flexible packaging from the F&B and fast-moving consumer goods sectors despite the various lockdown measures implemented across the region,” said Daibochi executive director Low Jin Wei in a statement.

He added that with the positive outlook, Daibochi is continuing to expand its capacity and capabilities.

The strengthened position will enable it to capture more growth opportunities in SouthEast Asia and Oceania.

“Alongside the capacity expansion, we also anticipate the need for a larger workforce to support our operations. We are cognisant of the challenging economic scenario in Malaysia and rising unemployment rate, and are working with the relevant authorities to prioritise the hiring of Malaysians while growing our talent pool,” said Low.

Commenting on its prospects, Low said Daibochi was seeing continual interest from its multinational clients for sustainable flexible packaging solutions, as they progressively implement sustainability targets across their global operations.

“By jointly working with Scientex in research and development efforts, we would strive to expand our role in supporting our customers’ targets.

“Furthermore, through collaboration with our clients, we have rolled out new sustainable solutions such as mono-material laminates, and are expecting more product commercialisation in the near term.”

“Daibochi’s resilient performance was buoyed by sustained orders for flexible packaging from the F&B and FMCG sectors.” Low Jin Wei