Tomypak back in the black from higher demand for packed food
KUCHING: Tomypak Holdings Bhd ( Tomypak) returned back in the black, driven by higher demand for packed food during the current Coronavirus Disease 2019 (Covid-19) period.
According to Kenanga Investment Bank Bhd’s research team ( Kenanga Research), the group was able to return to the black with a core net profit of RM3.5 million (compared with a core net loss of RM4 million) after six consecutive loss- making quarters.
It noted that Tomypak’s first half of the financial year 2020 ( 1HFY20) CNL was at RM0.4 million compared with RM6.5 million recorded in 1HFY19.
This was driven by improving top- line (up 5.9 per cent) on increased international sales, lower operating loss of RM1.1 million (compared with RM5.2 million) due to a reduction in overheads, and marginally lower financing cost of RM1.3 million (compared with RM1.8 million).
“Quarter- on- quarter ( q- o- q), top- line was up by 45 per cent on increased international sales on higher demand for packed food during the Covid19 pandemic.
“Consequently, the group finally recorded RM4.6 million operating profit (compared with RM5.8 million operating losses in 1QFY20) on lower overheads,” it said.
On its prospects, Kenanga Research noted that the group has installed most of the major equipment in its new Senai factory.
“Tomypak’s total capacity is currently at circa 40,000MT per year after investing a total capital expenditure of RM166 million for the new Senai factory,” it added.
“Going forward, we do not expect any new capacity expansion until FY21. We believe the group’s focus will be on ramping up sales and plant utilisation leveraging on improving demand for F& B products in light of the Covid19 pandemic, which would be crucial given the past few lossmaking quarters,” it opined.
Kenanga Research maintained its ‘ underperform’ rating on the stock given its six consecutive loss- making quarters since 4QFY18, and it remained cautious on margin improvements given the rising overhead cost in coming quarters.