Food packaging manufacturer SCGM Bhd announced 18.9% growth in revenue to RM72.5 million for the second quarter ended October 31 (2Q FY22) from RM61.0 million a year ago, driven by climbing demand for thermo-form food and beverage (F&B) packaging in Malaysia and its export countries.
Of 2Q FY22 total revenue, F&B packaging made up 85% or RM61.6 million, which continued to grow for the sixth consecutive quarter. The balance 15% or RM10.9 million of group revenue was contributed by other segments namely face masks, extrusion sheets, and packaging for electronics, medical and other sectors.
Local sales jumped 24.1% year-on-year to RM49.2 million in 2Q FY22 from RM39.7 million in the second quarter ended 31 October 2020 (2Q FY21). This grew at a much faster rate compared to export sales, which rose 9.3% to RM23.3 million in 2Q FY22 from RM21.3 million in 2Q FY21.
SCGM Managing Director Dato’ Sri Lee Hock Chai said that the reopening of economic sectors under the National Recovery Plan during the quarter, alongside the Group’s large customer base and distribution network, had worked in the Group’s favour.
“SCGM benefitted from the strong rebound in demand from F&B retailers and manufacturers, especially as Malaysia’s sectors gradually reopened after achieving high vaccination rate nationwide.
At the same time, we are mindful of the rising costs of raw materials, particularly resin, compared to the low-demand price points a year ago. The upward revision in selling prices in the second half of financial year ended 30 April 2021 had only partially addressed the higher costs, but we are hoping to mitigate it further with customizing new products to develop a more favourable sales mix.”
Despite higher revenue and lower finance costs, the Group’s profit before tax (PBT) dipped 8.1% to RM9.9 million in 2Q22 from RM10.7 million previously, due to higher resin prices as well as costs of COVID-19 vaccination and related expenses for its workers. Group net profit dipped 18.6% to RM7.8 million in 2Q22 from RM9.6 million previously, on increased deferred tax expenses.
The Group declared the second interim dividend of 1.7 sen per share in respect of FY2022, which will be paid on January 26 2022, with an ex-date on January 11 2022. Combined with the earlier-paid first interim dividend paid in October, the dividend payout in respect of FY2022 of RM7.1 million represents 44% of 1H FY22 net profit, in tandem with SCGM’s dividend policy of distributing at least 40% of net profits to shareholders.
