This article first appeared in The Edge Financial Daily, on April 21, 2016.

KUALA LUMPUR: Kian Joo Can Factory Bhd, which achieved record high earnings last financial year, needs to conserve cash for the aluminium can manufacturer’s expansion plan to sustain its earnings growth momentum, said its chief financial officer Ooi Teik Huat.

“Going forward, we will consider [to pay dividend], but [it’s] too early for me to say how much we will pay,” he told the press after Kian Joo’s annual general meeting yesterday.

He deemed 2016 as another year that would incur high capital expenditure (capex). Hence, Kian Joo might not be able to afford paying generous dividends.

Ooi said Kian Joo incurred a capex of RM191 million in the last financial year ended Dec 31, 2015 (FY15). In addition, the company’s committed capex was at RM136 million as at end-2015.

Kian Joo’s cash pile was at RM198.89 million against total borrowings of RM377.68 million as at Dec 31, 2015.

The group’s net profit grew 8.6% to RM131.31 million, while its revenue expanded 20% to RM1.6 billion. It declared two sen dividend for FY15, but none in FY14.

Meanwhile, the firm will invest US$23 million (RM89.24 million) to set up two carton box and packaging plants in Thilawa, the special economic zone in Myanmar.

Despite heavy capex, Ooi emphasises the group is in no hurry to do a cash call, as it has enough internal funds and borrowings to finance projects.

Ooi expects theplants to start operations by FY17. Meaningful contribution would only materialise in four to five years’ time, he added.

Currently, the group has manufacturing plants in Malaysia and Vietnam. Its share of exports from its Malaysian plant accounted for about RM300 million.

Ooi said the group hopes to tap into markets like Australia, New Zealand and other Southeast Asian markets to increase the share of export earnings in US dollars to mitigate foreign exchange (forex) risk.

On the termination of Aspire Insight Sdn Bhd’s RM1.47 billion offer to buy out Kian Joo’s assets and liabilities, Ooi noted that the offer price of RM3.30 per share is not right after two years since the offer was made.

“Since the offer came on board, there had been some legal suits and certain pending issues, such as an evaluation exercise that we needed to clear. [When these issues were cleared], it's been two years already, ” he explained to reporters, adding that the group realised it was time to review the pricing after two financial years.

“The company's performance is different from two years ago. That's why the board made a decision to go back and discuss it again,” he added.

He declined to reveal the ideal offer price that Kian Joo asked from Aspire, but stressed that Kian Joo remains open to new offers. However, there has been no fresh offer so far.

“In normal circumstances, the board will consider offers from all parties as long as they are through proper channels and with the right structure,” Ooi said.

Kian Joo gained nine sen or 2.8% at RM3.35 yesterday, for a market capitalisation of RM1.49 billion.