KUALA LUMPUR (March 19): Tissue paper maker NTPM Holdings Bhd saw its net profit jumped by nearly 10 times to RM29.68 million or 2.6 sen per share in its third quarter ended Jan 31, 2021 (3QFY21), from RM3.07 million or 0.3 sen per share last year, on higher operating profit.

Operating profit for the quarter rose by 231% to RM36.87 million versus RM11.14 million in 3QFY20, according to a filing with Bursa Malaysia today.

This was despite a 2.28% decline in revenue to RM193.17 million, from RM197.67 million in 3QFY20, no thanks to the decrease in sales of tissue paper products.

NTPM attributed the higher earnings to the lower cost of raw material stock consumed during the period coupled with a higher average selling price, which in turn contributed to the higher margin, as well as a RM12.6 million gain on the disposal of a subsidiary.

The group had declared a third interim dividend of 0.8 sen per share in respect of the financial year ending April 30, 2021 (FY21), payable on April 30.

On a quarter-on-quarter basis, its net profit grew 116% from RM13.74 million in 2QFY21, while revenue was 2.38% higher compared to RM188.67 million.

For the nine-month period of FY21, its net profit soared 26-fold to RM58.07 million, from RM2.22 million last year, while revenue was down by 2.72% to RM561.13 million from RM576.8 million.

Looking ahead, NTPM is optimistic of its prospects for the current FY21, adding that the group has taken the necessary actions to protect its manpower, sustain its operation and grow its revenue and profitability despite the fact that the hospitality industry, which is one of its market segments, has been severely impacted by the pandemic.

The group noted that since the start of the year, commodities prices have increased in general.

This is partly due to the perceived increase in demand caused by the expected improvement in the global economy with the arrival of the Covid-19 vaccines.

“The prices of the group’s main raw materials of virgin pulp and waste paper have similarly seen a rapid rise,” said NTPM, adding that the group will continue to manage its raw material sourcing diligently, but it will not be able to avoid being affected by the rising pulp and waste paper prices.

“Unless it can successfully pass on such cost increases to its customers, the group may not be able to maintain its current profit margin,” NTPM said.

At 5pm today, NTPM closed half a sen or 0.83% higher at 61 sen, valuing it at RM685.15 million. Over the past year, the counter gained some 74.3% from 35 sen.