SHAH ALAM: Industrial packaging manufacturer Scientex Bhd posted a higher net profit for 3QFY11 ended April 30, with the bottomline figure increased by 21.2% year-on-year (y-o-y) to RM20.39 million.

The increase in net profit was in line with the increase of 21.1% of the company’s topline to RM217.3 million, given the higher contributions by all divisions, especially the property development division.

For the nine-month period ended April 30, 2011 (9MFY11), revenue increased by 19% y-o-y to RM598.8 million, while profit after tax increased by 32.9% to RM70.7 million.

Scientex attributed the better financial results to the property development division, where it chalked up an impressive 62.1% growth in revenue to RM159 million for 9MFY11, compared with RM98.1 million recorded in the same period last year.

"For the nine months, all of Scientex's development projects in Pasir Gudang, Kulai, Skudai, and Melaka, continued to book in higher sales. Even the group's new project in Skudai — Taman Mutiara Mas — recorded a strong takeup rate due to the rising demand for property in the vicinity of the Iskandar Region in Johor," said Scientex managing director Lim Peng Jing in notes accompanying the results.

During 9MFY11, the property division earnings before interest, tax, depreciation and amortisation (Ebitda) expanded 103.2% y-o-y to RM46.5 million, due to higher revenue and better profit margins. As at April 30, 2011 the group's four property development projects had a total gross development value of RM2.1 billion to last till 2019.

Meanwhile, Scientex's industrial packaging division posted an 8.6% y-o-y revenue growth to RM439.9 million for 9MFY11. While sales tonnage and profit for stretch film and strapping band increased, lower sales for other niche products together with higher raw material prices and the weakening greenback led to a 5.4% drop in the division's Ebitda to RM41 million.

Lim said the weakening US dollar had muted the earnings growth in the industrial division despite a higher volume throughput. This is because most of the group's sale transactions were made in US dollar.

"While the group is seeing continued increase in demand for our stretch films, we anticipate that our industrial packaging segment may be faced with uncertainty from the weakening US dollar. Therefore, we are stepping up our initiatives to enhance our competitiveness even further, namely by increasing our production capacity to enjoy economies of scale," Lim spoke on the group's future planning.

Scientex declared an interim single-tier dividend of 10% or five sen per share in respect of FY11.

The board of Scientex has also approved and announced a dividend policy to pay a minimum of 30% of net profit attributable to shareholders as dividends. The dividend policy would be effective from FY2011 onwards, and is subject to the group's operating results, business prospects and new investment plans, amongst other considerations.

SHARE