Scientex extends growth streak with higher net profit
SHAH ALAM, SELANGOR: Global packaging manufacturer and leading property developer Scientex Bhd (Scientex) continued its growth streak by recording 42.6 per cent higher net profit of RM61.3 million in the third quarter ended April 30, 2016 (3Q16), compared to RM43 million a year ago.
3Q16 group revenue rose 19.5 per cent to RM543.9 million from RM455.3 million previously.
3Q16 manufacturing sales increased 20.1 per cent to RM382.8 million from RM318.8 million previously, as Scientex expanded its customer coverage in the Asia Pacific region.
Thepropertysegmentmeanwhile noted 18 per cent higher revenue of RM161.1 million in 3Q16 versus RM136.5 million a year ago, on the back of progress billings and steady take- up rates for properties in Melaka as well as Pasir Gudang, Skudai, Kulai and Senai in Johor.
Of total manufacturing revenue in 3Q16, consumer packaging sales contributed RM183.9 million, growing 44.6 per cent year-on-year from RM127.1 million.
Industrial packaging revenue amounted to RM198.9 million, 3.8 per cent higher than RM191.6 million a year ago.
“Scientex is clearly benefitting from the expansion of our consumer packaging operations, which allows us to become a larger- scale and operationallyefficient producer. Serving the recession-proof food and beverage (F&B) and fast moving consumer goods (FMCG) sectors also work to our advantage in terms of sales stability and growth.
“Furthermore, our Scientex technical development team is spearheading new product development in line with the changing form factor of packaging. For instance, the prevalence of ecommerce has resulted in higher demand for protective packaging, while packaging for the healthcare sector has to adhere to higher standards of hygiene. In this respect, we are actively engaging with customers to introduce
Scientex is clearly benefitting from the expansion of our consumer packaging operations, which allows us to become a larger-scale and operationally-efficient producer. Serving the recession-proof food and beverage (F&B) and fast moving consumer goods (FMCG) sectors also work to our advantage in terms of sales stability and growth.
new innovations to hone our competitive edge.
“Similarly, our property division has fared well with steady take up rates, and has total unbilled sales of RM652.7 million to be recognised until 2018. We intend to maintain the strategy of offering affordable homes below the RM500,000 mark to fulfil market demand for affordable properties,” managing director Lim Peng Jin said.
For the nine months ended April 30, 2016 (9M16), group revenue rose 21.5 per cent to RM1.6 billion from RM1.3 billion previously, driven largely by increased contribution from consumer packaging.
Net profit grew at a faster pace of 70.9 per cent to RM186.7 million from RM109.3 million a year ago, enhanced by favourable sales mix within and across segments, and reduced effective tax rate due to Reinvestment Allowances.
The board of directors proposed an interim single tier dividend of 12 sen per share, with ex-dividend and payment dates of July 14, 2016 and August 5, 2016 respectively.
Lim remained optimistic of the group’s prospects, given the smooth progress of capacity expansion and ongoing business development activities in the consumer packaging division.
Scientex’s consumer division currently comprises polyethylene (PE), cast polypropylene (CPP) and biaxially oriented polypropylene (BOPP) films.
The group is also on track to commence operations of its upcoming new BOPP plant in mid-2016, which would increase its BOPP production capacity by 10 times to 60,000 metric tonnes (MT) per annum. PE, CPP and BOPP films are components required by flexible packaging manufacturers.
“With our upcoming new BOPP facility complementing our CPP and PE film plants, Scientex is poised to be a single-source supplier for F& B and FMCG players and converters in Asia Pacific. We believe that this would enable us to make significant inroads in the region in the years to come,” concluded Lim.
Lim Peng Jin, Scientex managing director