Scientex 2Q profit up 8.5% on higher manufacturing, property revenue

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KUALA LUMPUR (March 19): Scientex Bhd's net profit in the second quarter ended Jan 31, 2019 (2QFY19) grew 8.5% to RM73.75 million from RM67.98 million a year ago, on higher revenue from better sales performance.

Concurrently, quarterly earnings per share rose to 15.08 sen from 14.05 sen in the same quarter the year before, Scientex's bourse filing showed.

Revenue in the quarter grew 21.6% to RM766.59 million from RM630.68 million previously.

"The increase was mainly due to better sales performance achieved from both the manufacturing and property divisions," said Scientex, pointing to double-digit year-on-year growth in both segments.

It should be noted that better profit margins were recorded under the manufacturing revenue. While average margins across both manufacturing and property segments in 2QFY19 saw a year-on-year decrease, it was an improvement at a quarter-on-quarter basis.

For the first six months ended Jan 31, 2019 (1HFY19), Scientex's net profit decreased 9.2% to RM127.41 million from RM140.38 million in the same period a year ago, dragged by higher interest expenses, taxes and a swing from foreign exchange (forex) gains in 1HFY18 to forex losses in the period.

Half-year revenue climbed 15.1% to RM1.48 billion from RM1.29 billion, thanks to a 21.5% increase in manufacturing revenue to RM1.12 billion, which more than offset the 1.3% decline in property revenue to RM355.4 million.

On prospects, Scientex intends to expand its production capacity in the US via automation, and explore new markets such as Myanmar.

"Scientex's expanded manufacturing footprint allows us to more aggressively capture new growth opportunities in the global flexible packaging market," said Scientex managing director Lim Peng Jin in a separate statement.

"In addition to the higher utilisation in our plants, our move to set up a new stretch film plant in the US and acquire Klang Hock Plastic Industries Sdn Bhd in 2018 have resulted in increasing contributions to the group," said Lim.

For the property segment, Scientex has in hand the recently-acquired 208.9-acre land in Melaka to expand its affordable housing footprint, while continuing to work on its newly-launched 65.3-acre Rawang development.

"We would continue to reinforce our position in the global flexible packaging market and Malaysia's affordable homes segments, guided by our vision to achieve one million metric tonnes in manufacturing capacity and build 50,000 affordable homes by 2028," added Lim.

At noon market break, Scientex shares fell one sen or 0.12% to RM8.45, giving it a market capitalisation of RM4.35 billion.