Scientex expects to perform better on falling oil price and strengthening of dollar

KLANG: Scientex Bhd, which will be spending RM300 million in capital expenditure (capex) over the next three years, said the current environment of low oil prices and strengthening of the dollar favours its business and should help it perform better in the current financial year.
Scientex reported an increase of 3.2% in net profit to RM30.27 million for the first quarter ended Oct 31, 2014, compared with RM29.34 million in the previous corresponding period, driven by higher sales from its manufacturing and property segments.
Revenue for the first quarter also rose 18.2% to RM431.07 million from RM364.81 million for the same quarter a year ago.
For the financial year ended July 31, 2014 the group made a net profit of RM148.45 million against RM1.59 billion revenue.
Its managing director Lim Peng Jin said that while he is cautious on the volatility seen in the global economy now, and the possible impact of Goods and Services Tax next year, it is generally optimistic about its business.
He said Scientex aims to grab a larger market share in the Asia Pacific packaging market which has been growing between 8% and 10% annually, especially in Southeast Asia.
"With the standard of living of people, growing population and urbanisations, the market is growing 8% to 10% per year. We hope to capture this and grow together with the market growth, and with the new capacity come into production, we expect to grow on volume of our export business," he said.
Scientex, which is the largest stretch film producer in Asia, exports 75% of its manufacturing products to over 60 markets globally.
The group's manufacturing segment's revenue was up 10.8% to RM320.3 million from RM289.2 million previously, on higher sales of industrial and consumer packaging products.
Currently it has manufacturing facilities in Malaysia and Vietnam, as well as sales and marketing arms in Japan and Indonesia.
Its property arm has township development projects in Johor and Malacca, with some RM1.5 billion worth of properties delivered to-date and another RM1.4 billion worth of projects in-hand.
Lim said the group will launch its new affordable housing development project, namely Rumah Mampu Milik Johor (RMMJ) located in Pasir Gudang, Johor in April next year.
"We are planning to launch about 2,000 units of this product, priced between RM80, 000 and RM150,000 a unit," he said.
Shareholders yesterday approved a final dividend of 13 sen per share for FY2014, to be paid on Feb 6, 2015.