Scientex Packaging expansion plans remain on track

KUALA LUMPUR: While Scientex Packaging (Ayer Keroh) Bhd's Myanmar operations continue to face challenging conditions, the group is optimistic of sustaining its performance in the coming financial year.

"The group’s expansion plan remains on track and the Group expects to be able to better serve its customers with more innovative and value added products as trends and packaging requirements evolve.

"The Group will continue to monitor the operational challenges due to factors such as the ongoing geopolitical tension, global supply chain challenges, shortage of labour and rising inflationary pressures," it said in a filing with Bursa Malaysia.

The packaging manufacturer added that the ongoing economic and political uncertainties in Myanmar continue to weigh on operations and are likely to affect its performance in the near term, despite encouraging demand for its FPP products.

"The group will continue to work with its joint venture partner to manage its operations to minimise any adverse effects whilst exploring options pertaining to the Myanmar operations," it said.

The group's outlook comes off the back of a RM43.15mil net profit in the financial year ended July 31, 2022, which was a slightly weaker performance than RM47.03mil in the previous year.

Earnings per share contracted to 13.09 sen from 14.37 sen previously.

This was despite a 28.6% year-on-year increase in revenue to RM774.05mil as the group experienced margin compression attributed to an overall increase in production and operational costs.

In the fourth quarter of the year alone however, the group posted an improved net profit of RM11.35mil compared with RM8.89mil in the same quarter in 2021 due to the absence of Covid-19 related issues such as temporary plant closures, workforce capacity restrictions as well as reduced demand from local customers.

The group declared a final dividend of 2.5 sen per share going ex on Dec 21, 2022, and payable on Jan 4, 2023.

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