Thursday 28 Mar 2024
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KUALA LUMPUR (June 22): Food packaging manufacturer SCGM Bhd's net profit plunged 97% to RM150,000 in the fourth financial quarter ended April 30, 2018 (4QFY18) from RM5.08 million a year ago, on higher resin prices, finance costs, depreciation charges, labour cost and foreign exchange losses incurred.

This resulted in its earnings per share falling to 0.08 sen for 4QFY18 from 3.59 sen for 4QFY17.

Quarterly revenue also dropped 8.8% to RM48.23 million from RM52.91 million, mainly due to lower sales from local and overseas customers which was affected by holidays during the current quarter under review, and the strengthening of the ringgit against major foreign currencies.

Nevertheless, the group declared a fourth interim dividend of 1.5 sen per share for the financial year ended April 30, 2018 (FY18), payable on July 25. This brings total dividend payout for the year to RM11.6 million or 70.7% of the group’s net profit for FY18.

The dismal fourth-quarter results dragged down the group’s net profit for the full FY18 to RM16.4 million, down 28.7% from RM23 million in FY17.

Revenue, however, rose 16% to RM207.42 million from RM178.79 million.

In a statement today, SCGM managing director Datuk Seri Lee Hock Chai said the next six months will be "extremely crucial" for the group as it embarks on installing new equipment in the newly constructed factory in Kulai, Johor and transfer machinery from the existing plant in stages.

"We are optimistic of beginning operations from our new production headquarters in end-2018, which would effectively mark a new era in our corporate history," he added.

SCGM currently has an extrusion capacity of 41 million kg per year. Once the new factory in Kulai is operational, the group’s total production capacity will increase to 67.6 million kg per year.

"In line with the significantly increased production capacity, the group will further expand its local and international markets," said SCGM in a filing with Bursa Malaysia.

While mindful of the continued challenging business environment, SCGM said it remains optimistic about the potential growth in its business upon full operation of the new plant.

"With the vast experience of the senior management and a committed workforce, the group will strive to achieve better financial results in the coming financial quarters," it added.
 
SCGM shares closed one sen or 0.56% higher at RM1.81 today, giving it a market capitalisation of RM348.9 million.

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