Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on September 19, 2018

KLANG: Thermal insulation material maker Superlon Holdings Bhd expects its top-line growth for the financial year ending April 30, 2019 (FY19) to rise at a faster rate of 10%, mainly driven by growing production capacity at its new factory in Vietnam, and increasing sales volume.

“Last year, our top line and bottom line were affected by currency exchanges. We hope to see a 10% growth in top line [in FY19] in US dollar terms,” said its executive director Liu Han Chao at a press conference after the group’s annual general meeting.

For the full FY18, its net profit tumbled 48.3% year-on-year (y-o-y) to RM12.2 million, due mainly to an unfavourable foreign exchange rate and higher raw material prices, though revenue rose 2.92% y-o-y to RM109.38 million from RM106.27 million.

Liu said the group’s core strategy has always been on growing its sales volume. The setting up of the factory in Vietnam is consistent with the group’s strategy to increase capacity, which will give the group better capability to serve and support more customers.

“External factors has benefits and costs for us and we are not able to control that sometimes, so we want to grow our capacity and capabilities as well as invest in research and development — that is our core growth,” Liu added.

According to Liu, Superlon’s new Vietnamese factory is on track for commercial production by April next year, or even as early as February.

“Currently, the physical part for the warehouse and factory is completed. So we’re now waiting for the machinery to arrive. Once they do, we will send our staff to Vietnam to install them and do some test runs ... Hopefully we can start commercial production before the Lunar New Year of 2019,” Liu added.

The new factory is expected to raise Superlon’s total production capacity to 10,500 tonnes of thermal insulation material per annum, from 9,000 tonnes now with its existing plant running at 80% capacity. The material is a major component of heating, ventilation, air conditioning and refrigeration systems for residential, commercial and industrial buildings.

Meanwhile, Liu said Superlon is testing out new uses for its thermal insulator, on top of looking at improving efficiency to reduce wastage to offset the challenges of surging raw material prices, to help enhance its profitability going forward.

Superlon’s share price has fallen from an all-time high of RM2.88 a year ago on Sept 18, to as low as RM1.01 on April 4. Yesterday, its stock settled at RM1.20, valuing the group at RM192 million.

On the group’s share price performance, director Calvin Chun said it is due to both the group’s financial performance and market sentiments. However, he believes the share price will recover once the group’s performance rebounds.

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