KUALA LUMPUR: Scientex Bhd
posted a firmer set of financial results in the second quarter ended Jan 31, 2019 and plans to launch property projects with a gross development value (GDV) of RM600mil in the second half.
The stretch film manufacturer and property developer announced on Tuesday its net profit rose by 8.5% to RM73.74mil from RM67.98mil.
The higher profit was led by higher plant utilisation in the manufacturing segment, aided by rising contribution from the new US stretch film plant in Arizona, US, and acquisition of Klang Hock Plastic Industries (KHPI), as well as higher progress billings for property development projects.
Its revenue increased by 21.5% to RM766.58mil from RM630.68mil. Earnings per share rose to 15.08 sen compared with 14.05 sen a year ago.
Revenue from Scientex's manufacturing segment rose by 20.3% to RM549mil while the property division reported a 24.9% increase to RM217.60mil.
For the first half, its net profit fell by 9.2% to RM127.41mil from RM140.38mil a year ago due to lower contribution from the property development segment and foreign exchange losses recorded in the manufacturing segment compared to a gain in the previous year. Its revenue rose by 15.1% to RM1.48bil from RM1.28bil.
Scientex managing director Lim Peng Jin said its expanded manufacturing footprint enabled it to “more aggressively capture new growth opportunities in the global flexible packaging market”.
“In addition to the higher utilisation in our plants, our move to set up a new stretch film plant in the US, and acquire KHPI in 2018, have resulted in increasing contributions to the group,” he said.
Lim added the company's affordable homes project in Rawang, Selangor, which was launched in February 2019, saw a take-up rate of 90% for the first phase.
“The Rawang development is our first in Klang Valley, and premised upon our growth strategy to expand our developments to more locations in Peninsular Malaysia,” he said.
He said the company's twin objectives were to reinforce its position in the global flexible packaging market with one million tonnes in manufacturing capacity and to build 50,000 affordable homes by 2028.
As for its corporate exercise involving the take-over of Daibochi, a leading regional flexible packaging provider, it said that it had, on March 4, extended a mandatory general offer (MGO) to Daibochi for all remaining shares, which is expected to conclude in April 2019.
The MGO had, on 18 March 2019 become unconditional, with Scientex holding 52.5% of Daibochi. The MGO would be open until 5pm on April 1.
“The combination of Scientex and Daibochi allows us to share synergistic resources, as well as collaborate on innovation and product development. This would strengthen our manufacturing division’s competitiveness, and is poised to create a formidable flexible packaging entity in the global market,” Lim said.
He also said Scientex had a healthy pipeline of new property launches that comprise mainly affordable homes.
“Our new launches in the first half of FY2019 totalled RM500mil in GDV, and we are targeting to launch another RM600mil in the second half of FY2019.”