KUALA LUMPUR (Nov 20): Flexible packaging maker Daibochi Plastic and Packaging Industry Bhd, whose third-quarter net profit rose 20.2% year-on-year, has obtained the quality and food safety management certifications in its Myanmar plant in October to enable it to target multinational corporation (MNC) clientele from the food and beverage (F&B) sector.

In a statement today, Daibochi said its 60%-owned subsidiary, Daibochi Myanmar, managed to secure the ISO 9001:2015 accreditation, as well as the Hazard Analysis and Critical Control Point Food Safety Management System (HACCP FSMS) certification.

“We are now equipped and ready to produce flexible packaging for global F&B and fast-moving consumer goods brands, and certainly sets us on the high-growth phase in the future," Daibochi managing director Thomas Lim said.

Daibochi Myanmar made its maiden contributions of RM6.5
million and RM1.8 million in revenue and pre-tax profit respectively to the group in the third quarter ended Sept 30, 2017 (3QFY17). It also generated pre-tax profit margin of 28.6% in the current quarter under review.

"We want to maintain this lean and mean structure, and go full force into leveraging on this cost advantage to deliver an earnings boost in the future. Hence, we are aiming for Daibochi Myanmar to achieve RM100 million revenue in two years,” Lim added.

Daibochi's net profit grew to RM7.22 million in 3QFY17 from RM6 million a year ago, while earnings per share rose to 2.2 sen from 1.84 sen.

Quarterly revenue also increased 8.5% to RM102.03 million in 3QFY17 from RM94.07 million in 3QFY16.

The group also declared an interim dividend of 1.15 sen per share amounting to RM3.8 million for the financial year ending Dec 31, 2017 (FY17), payable on Dec 28.

For the cumulative nine months (9MFY17), the group's net profit, however, slipped 3% to RM18.03 million from RM18.59 million in 9MFY16, while revenue came in flat at RM282.99 million from RM280.8 million.

On prospects, Daibochi said it is confident of recording a strong financial performance for FY17, driven by new financial contributions from the Myanmar plant, better wastage control and improved operating efficiency.

Daibochi also announced that effective FY17, the group’s dividend policy would be revised to distribute no less than 60% of its net profit to shareholders, excluding net profit contributions from Daibochi Myanmar. The dividend is to be paid on a quarterly basis.

"This is in line with the group’s intention to enable Daibochi Myanmar to reinvest its earnings, at least over the next two years, into the operations in order to expand its scope of works and establish a stronger foothold to capture the potential in the Myanmar and Southeast Asian region," said Lim.

"The group will review the dividend policy as and when appropriate, taking into account the progress and prospects of Daibochi Myanmar and other opportunities," he added.

Daibochi shares closed down one sen or 0.46% at RM2.19 today, with 18,900 shares done, bringing a market capitalisation of RM716.6 million.