Nylex 1Q net profit up 26% to RM2.93m

by **Cals** Thu 23 Oct 2014, 22:34

Nylex 1Q net profit up 26% to RM2.93m
By Gho Chee Yuan / TheEdge Markets.com | October 23, 2014 : 10:14 PM MYT

KUALA LUMPUR (Oct 23): Nylex (Malaysia) Bhd ( Financial Dashboard)'s net profit rose 25.75% to RM2.93 million for the first financial quarter ended Aug 31, 2014 (1QFY15) from RM2.33 million a year ago, due to higher profit contribution from the industrial chemical division.

Revenue, however, declined 13.93% to RM358.83 million from RM416.95 million in 1QFY14 due to lower contribution from both the industrial chemical and polymer divisions.

Eanings per share for 1QFY15 rose marginally to 1.52 sen from 1.21 sen a year ago.

Nylex told Bursa Malaysia in a filing today that its polymer division recorded lower sales of RM29.5 million, a 1.9% decrease from RM30.1 million in 1QFY14.

This was due to lower contribution from its manufacturing plant in Surabaya, Indonesia.

"Consequently, the division registered lower profit before tax (PBT) of RM2.6 million compared with RM3.2 million previously. The continued weakening of the Indonesian rupiah, coupled with the competition in the domestic market, have eroded our margins," it said.

The industrial chemical division's sales declined 14.9% to RM329.3 million against RM386.9 million last year due to product rationalisation where the group has discontinued marketing certain products which were loss-making.

Despite lower sales, the division contributed higher PBT of RM3.8 million compared with RM2.1 million in 1QFY14 due to lower losses suffered by foreign subsidiaries and higher profit contribution from its local distribution and manufacturing units.

Going forward, Nylex expects the trading environment for the remaining period ending May 31, 2015 will continue to be challenging.

"There will be pressure on product margins for both the industrial chemical and polymer divisions," it said, adding that the group will continue to seek ways to improve its profitability.

Shares of Nylex closed unchanged at 57.5 sen today, with 52,500 units changing hands. It has a market capitalisation of RM110.85 million.