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SAMCHEM (5147) SAMCHEM HOLDINGS BHD’s 3Q net profit jumps 32.59% to RM12.61m on improved profit margin, declares third interim dividend of 1 sen

KUALA LUMPUR (Oct 27): Samchem Holdings Bhd's net profit for the third quarter ended Sept 30, 2021 (3QFY21) jumped 32.59% to RM12.61 million from RM9.51 million a year ago, mainly due to improved profit margin as well as foreign exchange gains.

Quarterly revenue however dipped 5.47% to RM272.81 million from RM288.61 million achieved in 3QFY20, due to a decrease in sales volume owing to lockdowns in the group’s key markets being Malaysia and Vietnam, its filing with Bursa Malaysia showed on Wednesday (Oct 27).

The company also declared a third interim dividend of 1 sen per share and excluding this third interim dividend, it has to-date paid a dividend of 1.5 sen per share after adjusting for the bonus issue exercise completed on June 21, 2021.

For the cumulative nine months period, Samchem’s net profit surged 124.76% to RM50.8 million from RM22.6 million last year, while revenue increased 30.33% to RM975.07 million from RM748.13 million a year earlier.

On prospects, Samchem said the group’s performance is driven by the demand and supply for chemicals in the market, regional consumption and economic conditions and can be affected by exchange rate fluctuations, competition, disruptions to demand and supply, as well as Covid-19 pandemic challenges.

“The management will continue to focus on operational efficiencies and expansion of new products and service offerings to improve the group’s performance,” it said.

In a separate statement, Samchem chief executive officer Ng Thin Poh said the pandemic situation and lockdowns in Malaysia and Vietnam posed challenges in the third quarter, with economic activities significantly reduced.

“Working against these headwinds, we managed to deliver another commendable set of results, recording a 33% year-on year profit growth. This is a testament of our agility in responding to external disruptions and the defensive nature of our business.

“With the worst of the pandemic hopefully over, we are seeing a rebound in demand in the fourth quarter, with the reopening of most economic sectors across our key markets. Riding on this momentum, we are optimistic of continued strong performance for the rest of the year,” he said.

Ng noted Samchem is still in expansion mode and the group has recently commenced construction of its warehouse in Pulau Indah, which will double its storage capacity in Klang Valley.

“We are also confident of our prospects in Vietnam with its population of close to 100 million and a fast-growing export manufacturing sector. We are currently planning for further expansion in Vietnam and expect its contribution to grow exponentially over the next few years.

“Moving into 2022 and beyond, these initiatives will put us on a stronger footing to capture market share, amid an anticipated healthy demand backdrop,” he said.

Samchem's share price slipped two sen or 1.94% lower to close at RM1.01, valuing the integrated chemicals and lubricants distributor at RM549.44 million, with some 6.07 million shares having exchanged hands on Wednesday.


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