NTPM’s 1Q22 net profit drops 93.2% from higher raw materials, freights, weakening ringgit

The group’s revenue for 1Q22, however, increases by 8.1% on the increase in sales for tissue paper and personal care products

by AZALEA AZUAR / graphic TMR

NTPM Holdings Bhd’s net profit plunged 93.2% to RM1.1 million for the first quarter ended July 31, 2022 (1Q22), from RM15.8 million in 1Q21.

This is mainly due to the higher raw material cost, higher freight cost and the exchange losses on the depreciation of ringgit.

The group’s revenue for 1Q22 increased by 8.1% due to the increase in sales of both tissue paper and personal care products.

“The increase in revenue in the paper products segment was mainly due to the increase in average selling price (ASP), while, the increase in the personal care products was driven by both higher volume and ASP, especially baby diapers products,” it said in a Bursa filing last Friday.

On the other hand, NTPM’s consolidated profit before tax dropped 60.8% in the current quarter mainly due to the higher raw material cost and the exchange losses on the depreciation of the ringgit.

“Revenue from the personal care products segment for 1Q22 was RM65.7 million, an increase of 24% compared to RM53 million recorded in 1Q21.

“The increase in revenue was driven by higher volume and ASP, especially baby diapers products,” it said in the filing.

Meanwhile, the group’s profit before tax for its personal care products segment decreased by 5% to RM8.7 million in 1Q22 from RM9.1 million in 1Q21.

It was caused by the drop in profit before tax from rising costs of raw material, freight and exchange losses on the depreciation of the ringgit.

Commenting on its prospects, the group finds that its business operations will remain challenging and uncertain as the prices of raw materials, shipping costs, labour cost and the US dollars have increased and may go higher.

“The group has increased its product prices progressively but it can only partially offset the increase in the cost of production with the constraint of market conditions, competitors’ pricing and our market share.

“The board will continue to monitor the changing business environment to ensure its installed production capacity can be optimally utilised,” it advised.

On a side note, NTPM expects the demand for paper and personal care related products to remain relatively stable but may be unable to maintain its profitability in the coming quarter.