Thong Guan 2Q profit surges 51% to RM8.03m on value-added plastic products

by **Cals** Mon 25 Aug 2014, 03:22

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Friday, 22 August 2014 15:10

KUALA LUMPUR (Aug 22): Thong Guan Industries Bhd’s net profit surged 51% to RM8.03 million in the second quarter ended June 30, 2014, from RM5.3 million in the previous corresponding quarter.

Revenue rose 9.5% to RM195.9 million, from RM178.9 million a year ago.

The group also declared a tax exempt interim dividend of 3 sen per share or 3% in respect of the financial year ending Dec 31, 2014.

In a statement to Bursa Malaysia, the plastic packaging company said the higher profit was mainly due to a higher profit contribution from plastic products, as the group continued to align its focus to marketing value-added products.

As for the revenue improvement, it said it was mainly due to higher average prices of raw materials, which translated to higher selling prices compared to the same quarter last year.

For the half-year period ending June 30, 2014 (1H14), net profit stood at RM16.7 million, up 55% from RM10.8 million in the previous corresponding period, while revenue was RM373.7 million, up 7.5% from RM347.6 million a year earlier.

The group said the improved 1H14 results were due to the same reasons that caused the improvement in its quarterly top line and bottom line.

On its current year prospects, Thong Guan said its conventional stretch film has continued to face stiff competition in the market.

“However, [we] have managed to substantially differentiate [our] products and services to customers, and move further up the value chain to achieve better profit margin.

“[Our] investments in new nano-layer and thin film machines and on a research and development centre will further boost this effort.”