Scientex 3Q net profit down 8%, declares 10 sen dividend

KUALA LUMPUR (June 20): Scientex Bhd has posted an 8.06% decline in net profit to RM61.14 million for the third quarter ended April 30, 2018 from RM66.5 million a year ago, owing to lower contribution from the group's property division as recently launched projects were still in the early stages of progress billings.

Uncertainties during the election period also led to longer-than-expected timeframe in attaining regulatory approvals and permits for some of the property projects, Scientex said in a filing to Bursa Malaysia today.

Earnings per share for the quarter slipped to 12.5 sen, from 14.34 sen, the packaging manufacturer and property developer said.

Revenue for the quarter was also down 5.66% to RM600.18 million, from RM636.15 million a year ago.

The group has declared a single tier interim dividend of 10 sen per share for the financial year ending July 31, 2018 (FY18), payable on July 13.

For the cumulative nine-month period, Scientex's net profit rose 9.67% to RM201.52 million or 41.51 sen a share, versus RM183.75 million or 39.77 sen a share in the prior year. Cumulative revenue was up 7.77% to RM1.89 billion, from RM1.76 billion.

Going forward, Scientex expects to deliver a stronger performance in FY18 driven by encouraging sales orders, boosted further by oncoming contribution from the fourth quarter onwards from recently-acquired flexible plastic packaging player Klang Hock Plastic Industries Sdn Bhd (KHPI).

The addition of KHPI will add to immediate expansion in capacity, product portfolio and clientele reach, said Scientex.

KHPI has an annual revenue of close to RM400 million and the acquisition — completed in May 2018 — comes with a profit guarantee of RM21 million profit before tax for the 12-month period to March 31, 2019.

This acquisition would boost Scientex's total production capacity by approximately 30% to 455,000 MT, from 356,000 MT currently, and will improve its product mix and global market share.

"The group's manufacturing operations maintained its growth uptrend with higher sales of flexible plastic packaging, especially to export markets, as we continue to gain traction in securing new customers," said Scientex managing director Lim Peng Jin in a separate statement today. "Our enlarged operating scale also enables us to enjoy greater operating efficiency and deliver enhanced bottomline."

Meanwhile, Scientex said the group's property division expects to see resilient demand for affordable housing post the 14th general election.

"For our property development segment, we will continue to meet the ever-growing demand for affordable housing as evident by the strong take-up rate in our ongoing Melaka and Ipoh projects," said Lim.

"The group will also launch its affordable housing project in Rawang by the end of the year, thus marking our entry in (the) Klang Valley and boost ongoing and future gross development value (of our projects) to RM10 billion," he added.

At 2pm, Scientex was unchanged at RM6.70, for a market capitalisation of RM3.28 billion.