[StarBiz] Daibochi records lower Q2 net profit due to revised wage policy

11 August 2016

PETALING JAYA: Daibochi Plastic and Packaging Industry Bhd’s net profit declined 15.5% to RM6.1mil in its second quarter ended June 30, from RM7.2mil the same period last year due to revised wage policy effective since January, less favourable product mix and higher production wastage.

However, group revenue rose 8.2% to RM97mil from RM89.7mil previously driven by higher exports.

Its export sales surged 20.3% to RM56.7mil in the second quarter from RM47.2mil a year ago, in line with the stronger exports, primarily to existing customers in South-East Asia and Australia.

In a statement yesterday, Daibochi managing director Thomas Lim said that the group was set to achieve a record turnover in the current financial year ending Dec 31.

“At the same time, we are mindful of the challenges faced with regard to cost and labour shortages in the first half of this year,” he said.
He added that Daibochi was implementing measures to improve production and cost efficiency, which includese commissioning new machinery, conducting personnel training, and implementing better wastage control.

He said the group was on track to complete the construction of the second expansion phase of Daibochi Plant 2 in Jasin, Malacca in the fourth quarter of 2016.

The expanded built up area of the plant would be utilised for both production and warehousing, providing it the capacity to capture more business.

“We also expect to commence operations of a new blown film making machine in the same plant in end-2016. This will reduce our dependency on externally procured films, leading to lower raw material costs and better production efficiency,” he added.

Daibochi declared a dividend of 1.33 sen with estimated payout of RM3.6mil.

Together with the earlier paid dividend of 1.45 sen per share, total interim dividends in respect of 2016 amounted to 2.78 sen per share with total payout of RM7.6mil, or 60.3% of the first half 2016 net profit.

The group has a dividend policy to pay out at least 60% of net profit.

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News Room [StarBiz] Daibochi records lower Q2 net profit due to revised wage policy