Jag posts turnaround, sees brighter days ahead
Rise in copper prices has helped boost its performance
SHAH ALAM: After a tumultuous year in its financial year ended Dec 31, 2015 (FY15), Jag Bhd says that things are looking up again for FY17.
“We have turned the corner in FY16 and posted a turnaround in our bottom line. We reported a net profit of RM2.06mil compared with a net loss of RM19.79mil in FY15,” the company’s chairperson Datin Stacey Tan told StarBiz.
“The rise in copper prices in FY16, especially in the final quarter, has helped boost our performance.
“In the fourth quarter, we reported a net profit of RM2.4mil from a net loss of RM3.43mil in the same quarter of the previous year. We have had three consecutive quarters of profits,” Tan said.
Jag is an electronics-waste recycler that extracts and processes the ferrous, non-ferrous and precious metals that are contained within many electronic components today, and resells the secondary metals in the open market.
Tan said that during the low commodity cycle in FY15 and part of FY16, the company had also taken the opportunity to acquire more precious metals, which form about 20% of its total inventory today.
“We have quite a reasonable amount of precious metals that we have not processed yet. These are backdated stocks that have been bought before. If we sell it now, we will realise a gain,” she said.
The company had also, at the end of last year, managed to secure new business supply contracts that would add to its overall e-waste volume when it comes into effect this year.
“These contracts will add an estimated 15% to our e-waste volume and it will mean more sales for us once it is realised.
“Almost all of our supplies are from the semiconductor industry, thus any growth in demand in the semiconductor industry would be of benefit to us,” Tan said.
To cope with the additional volume that is anticipated from these new contracts, the company is allo- cating a capital expenditure of RM5mil to upgrade its machinery.
“We will allocate for this purpose wholly from our internally generated funds, as we have sufficient cash at hand. This will improve further the refining process of the output of our precious metals. It will help increase our production as well by around 10%,” she added.
“Our gross profit margin today is about 20%, while net profit margins at current prices are about 8%-10%,” Tan said.
From its low of US$4,331 per tonne recorded in January 2016, three-month rolling-forward copper prices on the London Metal Exchange had risen by some 35.28% to US$5,859 per tonne as at press time.
Meanwhile, Tan said the company is on track for its planned diversification into the property sector.
“We have got the development order for our mixed-development project in Klang and have submitted the building plans. We are targeting for a launch in the third quarter,” she said.