KUALA LUMPUR (Oct 21): Daibochi Plastic and Packaging Industry Bhd saw its net profit for the third quarter ended Sept 30, 2014 (3QFY14) plunged 32% to RM5.02 million or 4.42 sen per share, from RM7.4 million or 6.52 sen per share a year ago on rising raw material prices and higher operating costs that include wages and electricity tariffs.

Revenue in 3QFY14 slipped 5% to RM83.09 million from RM87.29 million.

Daibochi declared a third interim single-tier dividend of 2.5 sen, bringing the total dividend declared year-to-date to 9.5 sen. The third interim dividend will be paid on Dec 11.

For the 9-month ended Sept 30, 2014 (9MFY14), Daibochi’s net profit fell 13% to RM17.84 million from RM20.53 million previously, in which the group blamed higher raw material prices, particularly polyethylene and polypropylene resins and films.

Revenue, however, climbed 13% to RM260.46 million from RM230.14 million, attributable to growth in sales arising from higher export contribution from multinational (MNC) customers in the food and beverage sectors.

On its outlook, Daibochi is “optimistic” of achieving another record year in turnover.

“The group anticipates export revenue from a new business opportunity in Asean to materialise by the fourth quarter of the year. However, due to a competitive and challenging business environment with higher operating costs in electricity and labour, the group is expecting a dampened profit margin for the year,” said Dobochi in a statement to Bursa Malaysia today.

Moving forward, Daibochi is “positive” of continuing the strong growth in revenue from new business opportunities with several MNC customers, mainly in the export sector with majority coming from Australia and New Zealand.

“Daibochi believes that our efforts in developing higher value-added packaging will enhance group margins and provide product differentiation compared to industry peers,” the group said, adding that its board of directors is confident the said strategy will improve the group’s future profitability.