MELAKA: Daibochi Bhd posted its highest-ever net profit of RM47.7mil for the financial year ended July 31,2020 (FY20) on the back of RM619.3mil in revenue.
This is attributed by the regional and domestic demand for flexible plastic packaging (FPP) from the food and beverage (F&B) and fast-moving consumer goods (FMCG) sectors, which remained resilient.
The group also recorded a net profit of RM11.2mil in the fourth quarter FY20 on the back of RM155.8mil revenue, which were quarter-on-quarter increases of 2.5% and 3.6% respectively.
A comparison to the previous corresponding quarter and year were unavailable due to the change in the group’s financial year from Dec 31 to July 31.
According to Daibochi executive director Low Jin Wei, (pic) the FPP demand from prominent F&B and FMCG brands of multinational companies and domestic players in South-East Asia and Oceania remained stable even during the market uncertainties posed by the Covid-19 pandemic.
He said in a statement: “Our strong performance in FY20 reflects our substantial exposure to the essential consumer goods such as food and other staples, which remain in high demand despite the impact of Covid-19 on global consumer sentiment.
“Riding on this, we are committed and making good progress in our RM100mil capital expenditure spanning a two-year period from FY20 to FY21, involving the purchase of new machines which will boost our annual production capacity by about 60%.
“The capacity expansions will support our commitment to target more opportunities across South-East Asia and Oceania, as well as further reinforce our position as a trusted provider of flexible packaging solutions to major domestic and global brands, ” he added.
Of the total capex, RM60mil is allocated for the purchase of 13 machines spanning the printing, lamination, and bagging processes.
Of this, seven machines were commissioned in the second half of FY20, and another six are expected to be commissioned in FY21.
Daibochi has also allocated an additional RM40mil in FY21 for eight more machines, which would bring expanded capacity to 60% in total, with four machines already contracted to date. The group would maintain its net gearing level below the 0.5 times mark.
On the group’s prospects, Low said: “Our prospects are bolstered by increasing demand for sustainable packaging solutions by MNCs and other prominent brands in Malaysia and regionally, in line with global sustainability trends.
“Our joint research and development prowess with Scientex positions us strongly to capture more opportunities, and we are looking to commercialise more sustainable solutions with our clients in the near future.”
Daibochi is proposing a final dividend of 3 sen per share for FY20, with ex-date on Dec 30,2020 and payable on Jan 15, .
Together with an earlier paid interim dividend of 2 sen per share, total dividends amount to 5 sen per share with total payout of RM16.4mil representing 34.3% of net profit for FY20.
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