MIECO (5001) - Higher selling price pushes Mieco Chipboard’s 3Q profit up 3.7 times


Adela Megan Willy/theedgemarkets.com
November 20, 2017 17:37 pm +08

KUALA LUMPUR (Nov 20): Mieco Chipboard Bhd’s net profit surged 3.7 times in the third quarter ended Sept 30, 2017 (3QFY17) from a year earlier, thanks to higher selling price of plainboard and improved production efficiency.

In a filing with Bursa Malaysia, Mieco said net profit jumped to RM15.62 million in 3QFY17, from RM4.23 million in 3QFY16. Earnings per share grew to 2.97 sen, from 0.8 sen.

Quarterly revenue rose 11.1% to RM101.13 million in 3QFY17 from RM91.03 million in 3QFY16, mainly due to continued strong selling prices of plainboard.

For the cumulative nine months (9MFY17), Mieco’s net profit came in at RM34.56 million, down 4.6% from RM36.24 million a year ago, due to the one-time exception of RM35 million gain on the sale of Mieco Wood Products Sdn Bhd in 1QFY2016.

Revenue for 9MFY17, however, improved by 18.2% to RM273.86 million, from RM231.71 million a year ago, thanks to higher overall sales volume, better plainboard selling prices and improved production efficiency.

On outlook, Mieco said it foresees more competitive and challenging market conditions in the particle board industry, as a result of downward pricing pressure on their products.

The filing explained that pricing pressure is due to the softening of global demand and keener competition on the recent entrance of new players in the market.

“Nevertheless, the group will continue to explore new market opportunities — be it local or overseas markets, streamline production efficiency and stringent cost control, develop effective branding strategies, and shift towards higher value products to mitigate the market challenge,” Mieco added.

Mieco shares settled three sen higher at RM1.18 today, with about 5.93 million shares done, for a market capitalisation of RM619.5 million.