Mieco Chipboard's 1Q earnings soar on unit disposal gain

by **Cals** Sun 29 May 2016, 23:52

Mieco Chipboard's 1Q earnings soar on unit disposal gain

By theedgemarkets.com / theedgemarkets.com | May 27, 2016 : 5:52 PM MYT
KUALA LUMPUR (May 27): Mieco Chipboard Bhd's net profit for the first quarter ended March 31, 2016 (1QFY16) came in near 10 times higher at RM31.2 million compared to RM3.2 million in 1QFY15, mainly due to the inclusion of a RM35 million gain from the sale of its wholly-owned unit, Mieco Wood Products Sdn Bhd.

Excluding the disposal gain, the chipboard maker's net earnings for the period would be at RM3.8 million, as it saw lower finance costs and recorded RM873,000 in other income (compared to RM464,000 in other expenses previously).

Its revenue for 1QFY16, however, dipped 28.2% to RM61.4 million from RM85.5 million a year ago, largely due to lower production output at its Lipis Plant after a fire broke out and damaged certain machinery there, according to its bourse filing today.

It also updated that an insurance claim has been submitted for the losses.

Meanwhile, the group is cautiously optimistic that domestic growth will stabilise and show signs of rebounding in the later half of the year, notwithstanding the prevailing uncertain global economic conditions.

"The group hopes to maintain positive financial results for the year with continued strong focus on value-added products with higher margin, and responding to customer needs for more complex and high quality products," it added.

Mieco's shares closed one sen or 1.17% lower at 84.5 sen today, valuing it at RM177.45 million. The stock has been on a down trend since Nov 19 last year, when it was trading at RM1.30.