KUALA LUMPUR (Dec 17): Packaging materials manufacturer cum property developer Scientex Bhd’s net profit grew 14.3% year-on-year to RM92.53 million in the first quarter ended Oct 31, 2020 (1QFY21), from RM80.96 million in the same quarter last year, as its packaging division reported higher earnings.

Operating profit at its packaging business grew to RM68.6 million from RM55.5 million, mainly contributed by a better sales mix and profit margin from its diverse range of packaging products, said Scientex in a stock exchange filing today.

The packaging business' operating profit made up about 54% of the group's total, with the property segment contributing the remaining 46% (RM58.17 million).

The improved bottom line came despite an 8.6% decline in revenue to RM802.26 million from RM877.37 million. The group did not declare any dividend for the quarter.

On prospects, the group remains cautiously optimistic that its FY21 ending July 31 will remain positive for the packaging division, driven by stable demand for its flexible plastic packaging products.

“With the recent rise in raw material prices and acute shortage of export containers, the group remains vigilant in monitoring its operations closely to mitigate disruptions to its businesses and supply chain,” said Sceintex.

Additionally, Scientex said the longer-term strategy for the group is to produce more sustainable value-added packaging products to meet the demand of its customers.

“We intend to continue enhancing our global competitiveness in the high-growth packaging segment, as we increasingly support demand from essential food and beverage and fast-moving consumer goods conglomerates,” said its chief executive officer Lim Peng Jin in a separate statement today.

On its property segment, the group said the completion of its Cheras land buy in the current quarter is expected to contribute positively to the group’s revenue from the next financial year onwards. As for the pending acquisitions of land banks in Seremban, Negeri Sembilan, Jasin in Melaka, and Pulai in Johor, these are expected to be completed by the first half of the calendar year 2021.

“Our property segment is also poised to chart significant milestones by ramping up our construction progress and new launches, as well as enlarging our landbank further. We will leverage on our strong brand in the affordable housing segment to expand our footprint,” Lim added.

Scientex’s shares closed 28 sen or 2.28% to RM12.02 today, valuing it at RM6.21 billion. Year-to-date, the counter has risen some 26% from RM9.55.