This article first appeared in The Edge Financial Daily on March 27, 2019
KUALA LUMPUR: Thermoform food packaging manufacturer SCGM Bhd’s third quarter ended Jan 31, 2019 (3QFY19) saw a net loss of RM694,000 versus a net profit of RM5.4 million a year ago, no thanks to pricier raw materials and increased finance costs.
A higher operating expenditure (opex) incurred in its old and new plants during the transition period when it shifted operations also weighed on its performance during the quarter.
This resulted in a loss per share of 0.36 sen for the quarter versus an earnings per share of 2.79 sen in the year-ago quarter, its filing with Bursa Malaysia showed.
This was despite revenue rising 4% to RM55.64 million from RM53.42 million on higher local demand for food and beverage packaging.
It declared a third interim single-tier dividend of 0.25 sen per share for FY19, payable on April 26.
The weaker quarterly results also lowered its net profit for the cumulative nine months to RM2.02 million, down 88% from RM16.25 million a year ago, despite cumulative revenue rising 6% to RM168.87 million from RM159.19 million.
Earnings per share fell to 1.05 sen from 9.19 sen.
“The decrease resulted from higher operating costs in the old and new plants in the transition period, a higher depreciation from an enlarged machinery base, an increased cost of utilities in line with usage, as well as higher raw material and finance costs,” SCGM said.
“While we made considerable progress in shifting our operations from the old to new plants in 3QFY19, we still incurred operating expenditure from both plants, and grappled with higher raw material costs compared with that a year ago. Nonetheless, the full installation and commissioning is targeted in the fourth quarter ending April 30, 2019, and thus we expect full-year contribution from the new plant in the financial year ending April 30, 2020,” SCGM managing director Datuk Seri Lee Hock Chai said in a media statement.
SCGM shares closed two sen or 1.79% higher at RM1.14 yesterday.