23 October 2014

KUALA LUMPUR: Daibochi Plastic and Packaging Industry Bhd, a leading flexible packaging solutions provider, expects its customer based expansion to drive the group’s revenue growth in the near term.

Managing director Thomas Lim said the year-to-date has been challenging for the domestic flexible packaging industry due to increased operating costs, particularly utilities and wages.

“Additionally, we noted a change in order profile in the quarter under review, where we ran more small-volume orders, resulting in lower production efficiency,” he said in a statement on Tuesday.

To cushion the impact, he said the groups has accelerated its efforts to boost productivity even further by reducing wastage, and installing industrial electricity savers (e-Savers) for its key machinery to achieve better energy efficiency.

“By end-2014, we would have equipped our manufacturing lines with 42 units of the e-Savers, which will reduce our electricity consumption in the long run,” he said.

For the third quarter ended Sept 30, 2014, Daibochi’s revenue from the core packaging segment stood at RM82.7million, up 2.7% from RM80.5 million a year ago.

Including revenue from the property segment – which is being phased out – 3Q14 group revenue amounted to RM83.1million, versus RM87.million a year ago.

The property segment contributed RM6.7 million to its Q3’13 revenue, Daibochi said.

However the group’s profitability was impacted by higher raw material costs as well as increased operating expenses of electricity and labour in the quarter.

Daibochi earned RM5 million in net profit in 3Q14, compared to last year’s RM7.4 million.

For its nine months, net profit stood at RM17.8 million on RM260.5 million revenue against RM20.5 million net profit on RM230.1 million a year ago.

Daibochi declared a third interim single tier dividend of 2.5 sen for its of FY2014, which will be paid on Dec 11, 2014.

Together with the previously paid first and second interim single tier dividends of 3.5 sen and 3.5 sen each, net dividend payout in respect of FY2014 stands at 9.5 sen per share or RM10.8 million, translating to 60.6% payout ratio.