Box-Pak’s net profit surges 141% on higher revenue from Vietnam operations

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KUALA LUMPUR (Aug 18): Box-Pak (Malaysia) Bhd’s net profit more than doubled to RM4.07 million or 6.77 sen a share in the second quarter ended June 30, 2015 (2QFY15) from RM1.69 million or 2.81 sen a share a year ago, as revenue from its Vietnam operations received a boost from the ringgit’s depreciation.

“This improvement was mainly contributed by increase in sales from the Ho Chi Minh plant and reductions in losses from the Hanoi and Johor (Malaysia) plants,” it said in a filing with Bursa Malaysia today.

The carton box manufacturer’s revenue was higher by 12.4% to RM97.81 million in 2QFY15 from RM87.00 million in 2QFY14.

In the six months ended June 30, 2015 (6MFY15), Box-Pak’s (fundamental: 0.6; valuation: 1.7) net profit tripled to RM6.59 million or 10.98 sen a share from RM2.19 million or 3.64 sen a share in 6MFY14.

Revenue was 16.5% higher at RM193.92 million from RM166.47 million.

The group said the strengthening of US dollar against regional currencies in 2015 poses a challenge for the group as some of the materials bought by the group are US dollar denominated.

“Competition in the carton industry in Malaysia and Vietnam has remained stiff and in order to maintain its market share, the group will need to constantly review its price structure,” said Box-Pak.

It added that the implementation of the goods and services tax in Malaysia in 2015 has an adverse cash flow impact to the group.

“Despite these challenges, the group will constantly review its market position and operational efficiency and continue to remain resilient and profitable in 2015,” said Box-Pak, adding that it  expects its Hanoi and Johor plants to turnaround by the second half of 2015.

Box-Pak shares closed 21 sen or 8.54% lower at RM2.25, giving it a market capitalisation of RM147.66 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)