Oceancash posts 76% jump in Q4 pre-tax profit

The improved performance was driven by higher sales in its insulation division and better cost control in the hygiene division.

KUALA LUMPUR: Non-woven fabric manufacturer Oceancash Pacific Bhd’s pre-tax profit jumped 75.9% to RM1.7mil in the fourth quarter ended Dec 31,2020, compared with RM1mil in the preceding quarter.

The improved performance was driven by higher sales in its insulation division and better cost control in the hygiene division.

The group said its revenue was up marginally at RM21.3mil compared with RM21.1mil in the preceding quarter of the previous year.

“The group had shown strong business resilience despite the pandemic and remained profitable for all quarters throughout 2020, ” it said in a statement.

Oceancash declared a single-tier dividend of 0.8 sen per share for financial year 2020 (FY20).

Meanwhile, Oceancash said its hygiene division posted an increase in sales to Thailand, China, Bangladesh and Australia on a quarter-on-quarter and year-on-year basis.

As such, the group’s pre-tax profit for the fourth quarter of 2020 was only 4.4% below RM1.8mil posted in the fourth quarter of 2019.

Similarly, Oceancash’s revenue for fourth-quarter 2020 was 4.1% lower from RM22.2mil achieved a year ago, dragged by the insulation division in Malaysia which was not in operation for two months amid the movement control order, resulting in lower sales in the subsequent quarters.

“The group’s insulation division in Malaysia has resumed production operations since June 2020 and we have observed an increase in new car sales in the Malaysian market since July.

“During the fourth quarter, Oceancash is glad to announce that the insulation division in Malaysia is already back to pre-pandemic production levels, ” it said.

The group noted that new motor vehicles sales in the Indonesian market were also affected by the Covid-19 pandemic.

Given that non-woven is the key raw material used in the production of personal protective equipment (PPE), Oceancash general manager Lor Seng Thee is optimistic that the strong demand for non-woven will continue to support its ongoing plan to expand its production capacity in the hygiene division.

“This new expansion will mark a significant milestone for the group as it involves a major upgrade in production technology, which gives us the capacity to produce 3-ply materials for 3-ply masks, as opposed to most of the machines in the industry with capabilities of only producing 1-2 out of the 3-ply material needed for the production of 3-ply masks.

“This technology will clearly differentiate us from other peers in the industry and will certainly provide the group a significant competitive advantage.

“In addition, the expansion will continue to support our core customers in the disposable hygienic products industry, ” he added.

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