Market instability a damper for Scientex
PETALING JAYA: Scientex Bhd is cautiously optimistic that it will achieve a better performance in the coming financial year.
The group, which reported a 13% drop in net profit to Rm124.98mil for its fourth quarter ended July 31, 2022, said its packaging division continues to see economic headwinds with the threat of global recession fanned by inflationary pressures.
“The ongoing geo-political tensions has further created market instability and exacerbated the supply demand imbalances with the resultant dampened global economic outlook for the near term.”
For the fourth quarter, Scientex’s revenue rose to Rm1.1bil from Rm970.36mil in the previous corresponding period.
Basic earnings per share stood at 8.06 sen, compared with 9.20 sen previously.
For the financial year ended July 31, 2022, Scientex’s net profit dropped to Rm409.87mil from Rm457.23mil in the previous corresponding period, while revenue stood at Rm3.99bil compared with Rm3.66bil a year earlier.
Scientex also said the packaging division continues to face operational challenges caused by global supply chain challenges, shortage of labour and volatility in raw material prices.
“While overall demand for the group’s packaging products continues to be relatively stable, the group continues to adopt a proactive stance and monitor all these developments.
“This is as they evolve to ensure appropriate and timely response to such external developments whilst continuously strengthening operational resilience and supply chain efficiencies to build up competitive strengths.”
On its property business, Scientex said the division saw the demand for its affordable housing remaining resilient, adding that the recent announcement of 100% stamp duty exemption incentives for first-time Malaysian homebuyers for properties priced RM500,000 and below is expected to spur demand for affordable housing.
“With the re-opening of its international borders, the labour shortage issue in the construction industry would also be gradually addressed as more foreign workers are expected to be recruited in the coming financial year.
“Inflationary pressures resulting in an increase in construction materials costs are constantly being monitored and addressed with greater vendor participation to enable procurement of construction materials at competitive prices.”
Scientex said it is also reviewing its product pricing periodically to address rising cost issues as part of its on-going efforts to maintain its product affordability.
“For the current financial quarter, the division has seen strong take up rate for its new property launches in Scientex Rawang in Selangor, Scientex Seremban in Negri Sembilan, Scientex Bandar Jasin and Scientex Durian Tunggal 2 in Melaka.
“For the coming financial year, the group plans to launch several new phases in Kedah, Penang, Selangor, Negri Sembilan, Melaka and Johor with emphasis on its branding and affordable pricing in its projects which are strategically located throughout the peninsula.”
Scientex also declared a single-tier final dividend of five sen per ordinary share, to be paid on Jan 9, 2023.