Daibochi’s 1Q earnings rise on high demand

by AZALEA AZUAR / pic credit: daibochi.com

DAIBOCHI Bhd’s net profit jumped 16.5% year-on-year (YoY) in its first quarter ended Oct 31, 2020 (1Q21), to RM12.8 million due to higher sales to major consumer brands.

According to a filing to Bursa Malaysia yesterday, the packaging group’s revenue also recorded an increase of 2.7% YoY to RM156.7 million mainly due to better sales achieved in the domestic market, which made up to RM88.5 million or 56.5% of group revenue.

Exports remained largely unchanged at RM68.2 million in 1Q21 versus RM68.3 million previously.

“In line with the higher sales recorded in the current financial quarter under review, the group’s operating profit was RM17.6 million,

an increase of 6.7% compared to RM16.5 million recorded in the preceding year’s corresponding quarter,” it said in a release yesterday.

Daibochi’s revenue for the three months ended Oct 31, 2020, rose 0.6% to RM156.7 million from RM155.8 million in the preceding financial quarter.

Group profit before tax increased 30.9% to RM17.2 million from RM13.1 million in the preceding financial quarter, consistent with the increase in revenue.

In the preceding financial quarter, there was an impairment of goodwill recognised amounting to RM4 million.

Daibochi shareholders approved the proposed final dividend of three sen per share.

According to Daibochi ED Low Jin Wei, the demand from food and beverage (F&B), and fast-moving consumer goods (FMCG) sectors supported the company to remain resilient and expand its capacity.

“Today, we continue to reinforce our regional leadership by aligning our research and development (R&D) activities with our customers’ goals to adopt sustainable packaging solutions towards carbon neutrality,” he explained.

The group has managed to commercialise a variety of sustainable flexible packaging products through joint R&D with Scientex Bhd and their multinational corporation clients so far.

These products are mostly mono-material laminates that are 100% recyclable.

“In addition to supporting increasing demands for sustainable packaging solutions, we also continue to fulfil the growing requirements for our existing packaging products. In this regard, we are well on track in our RM100 million capital expenditure (capex) programme to expand our production capacity by 60%.” Low said.

Low added that the expansion would come soon to support the company’s growth efforts.

Daibochi is currently overseeing an increasing coverage of new products in the F&B and FMCG segments, and also aiming to grow its customer base in South-East Asia and Oceania.