KUALA LUMPUR (Nov 14): BP Plastics Holdings Bhd has reported a nearly 46% fall in net profit to RM1.41 million for the third quarter ended Sept 30, 2014 (3QFY14), from RM2.6 million a year earlier.
Quarterly Earnings per share (EPS) shrunk to 0.77 sen, from 1.44 sen.
However, the industrial plastic packaging bags and stretch film producers quarterly revenue declined marginally to RM66.37 million, 3.11% lower than RM68.5 million in 3QFY13.
For the cumulative nine months ended Sept 30 (9MFY14), the manufacturer's revenue expanded to RM214.28 million — an increase of 22% from RM175.64 million in the corresponding period last year due to higher sales, particularly in the export market.
Net profit for the period meanwhile, climbed 4.82% to RM7.83 million, from RM7.47 million a year ago.
Going forward, BP Plastics said it would focus on improving its cost management as a bid to mitigate the rising operating costs, due to the effects of government fuel subsidy reduction and the nationwide minimum wage implementation.
In addition, the company would continue to seek opportunities for machine and product innovation, and implement strategies to achieve higher export sales, as the demand for manufacturing goods is increasing.
"The group is cautiously optimistic of delivering a satisfactory financial performance for the year ending Dec 31, 2014," it added.
BP Plastics was featured as an Insider Asia's stock pick on Nov 6 (last Thursday).
Insider Asia rates this company a 2.05 out of 3 on fundamentals, and 2.4 out of 3 in terms of valuation attractiveness.
"The stock is currently trading at trailing 12-month P/E of 13.29 times — low, relative to its 20.1% earnings growth over the same period," it said.
Insider Asia added that plastic packaging companies are seen as beneficiaries of falling crude oil prices — the cost for raw materials such as resin, are closely correlated to that of oil.
BP Plastic's share price dropped 1.5 sen to close at 90.5 sen, translating into a market capitalisation of RM166.19 million.