TGUAN 7034 THONG GUAN INDUSTRIES BERHAD 2Q profit up 15% on higher demand and price, pays 1.25 sen dividend

 TGUAN 7034 THONG GUAN INDUSTRIES BERHAD 2Q profit up 15% on higher demand and price, pays 1.25 sen dividend

KUALA LUMPUR (Aug 25): Thong Guan Industries Bhd’s second quarter net profit rose 15.28% to RM29.47 million or 7.65 sen per share from RM25.56 million or 6.7 sen per share a year earlier on better contribution from all its business segments.

Revenue for the quarter ended June 30, 2022 (2QFY22) expanded 23.43% to RM379.3 million from RM307.3 million, according to the Kedah-based plastic packaging products maker’s filing with Bursa Malaysia.

The group declared a second interim dividend of 1.25 sen per share, payable on Oct 18. This brings its year-to-date dividend payout to 2.5 sen, against 2 sen in the same period last year.

In the first half of the year, Thong Guan's cumulative net profit climbed 14.23% to RM54.06 million from RM47.33 million a year earlier as revenue rose 20.84% to RM712.3 million from RM589.44 million.

Commenting on the 2QFY22 result, the group said it has seen positive order flows from its existing and new customers leading to double-digit growth in revenue for both the plastic and food and beverage divisions.

The plastic packaging products segment saw an improved profit before tax (PBT) of RM34.78 million versus RM33.56 million in 2QFY21, as revenue rose 22.3% to RM347.96 million from RM284.47 million.

The group said the improvement rate for PBT was significantly lower than the increase in sales due mainly to the higher average raw material cost, higher labour cost caused by the increase in minimum wage and exchange losses on the depreciation of ringgit.

The increase in revenue, meanwhile, was mainly due to the rise in the average selling price of stretch film as well as  increase in both volume and average selling prices of industrial packaging, garbage bags and PVC cling film.

Thong Guan said the food, beverages and other consumable products segment posted a PBT of RM2.9 million in 2QFY22 compared with RM895,000 a year earlier, due to an increase in sales and overall margin improvement in all products type.  

Revenue for the segment was higher by 37.3% to RM31.34 million from RM22.83 million due to the overall increase in volume and average selling prices of tea and coffee products and increase in sales of other consumables products.

Shares in Thong Guan closed three sen or 1.17% higher at RM2.60, giving the group a market capitalisation of RM1.01 billion.

http://www.theedgemarkets.com/article/thong-guan-2q-profit-15-higher-demand-and-price-pays-125-sen-dividend