Kian Joo 3Q net profit jumps 18%

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KUALA LUMPUR (Nov 19): Kian Joo Can Factory Bhd posted a 18% increase in its net profit for the third quarter ended Sept 30, 2014 (3QFY14) to RM37.83 million or 8.52 sen per share from RM31.93 million or 7.19 sen per share a year ago on higher revenue contribution from the cartons division and share of results of a joint venture.

Revenue in 3QFY14 advanced 1.5% to RM331.62 million from RM326.75 million previously.

Kian Joo did not declare any dividend in 3QFY14.

For the cumulative nine months to Sept 30, 2014 (9MFY14), Kian Joo saw its net profit declined 10% to RM85.23 million or 19.19 sen per share from RM94.54 million or 21.28 sen per share from the same period last year, owing to reduced exports in its operation in Vietnam, as well as margin compression resulted from higher material, utilities and other operating costs.

“Geopolitical unrest in the Middle East had an indirect impact on the group's Vietnam operations, as it affects the export of consumer products from Vietnam, which in turn reduces demand for packaging material supplied by the group,” Kian Joo said in a filing with Bursa Malaysia this evening, adding that a payment for retirement benefit of a former director was also accounted in the latest financial results.

Revenue for 9MFY14, however, climbed 3% to RM982.06 million from RM950.01 million, on a 20% jump in sales from the cartons division.

On its outlook for the rest of the year, Kian Joo said it will continue to explore and take measures to streamline its operations, as well as manage its operational costs, while protecting and growing its regional market share.

“Despite the challenges posed in 2014, the group expects its domestic and Vietnam operations to remain resilient and profitable,” it added.

Kian Joo’s share price has fallen 15.84% from RM3.41 on May 2 to a low of RM2.87 on Nov 14. However, it recently rebounded to close at RM3 today, giving it a market capitalisation of RM1.33 billion.

The recent upward movement of Kian Joo’s share reflected investors’ sentiment towards the group’s announcement last week.

Kian Joo had on Nov 11 announced that the Kuala Lumpur High Court has struck out a suit filed against its major shareholder, Can-One Bhd by Datuk Anthony See Teow Guan.

See, a director of Kian Joo, had in May commenced legal action against Can-One Bhd, its unit Can-One International Sdn Bhd, and four others including Kian Joo in a bid to prevent Can-One and Can-One International from voting for the sale of Kian Joo’s assets and liabilities to Aspire Insight Sdn Bhd.