Scientex ... Apr 09

It expects its coming quarter earnings to stabilise with an improvement in margins. While the prices of resins in particular remained volatile, an improvement in prices was on the cards, adding that the group expansion plan was still ongoing.

Its manufacturing division also includes the production of automotive parts.

On the company’s plans going forward, due to the stagnant domestic automotive industry, Scientex had scaled down its automotive parts division and was focusing more on the manufacturing of industrial plastic products and property development.

Since the consolidation of the group in 2008, manufacturing and property development have been the mainstay of the company, contributing about 85% and 15% of its revenue respectively.

Scientex’s shor-term outlook remained bleak, tempered by the slowdown in its exports. Scientex currently exports about 70% of its products to over 60 countries, mainly to Japan, the Middle East, Eastern Europe and other Asia-Pacific countries.

Its main product in the manufacturing division is industrial stretch film, besides flexible intermediate bulk containers (FIBC) bulk bags, strapping bands and corrugated cartons.

On its property division, Scientex was still looking at expanding its landbank to position itself for the eventual upturn in property market. It has also started the second phase of its project in Kulai, Johor on April 1. The Kulai township project comprising about 200 units of landed residential properties with selling prices of between RM100,000 and RM120,000 is 33% completed and has another five to eight years of development left. Scientex’s flagship property project is Taman Scientex in Pasir Gudang, a township development on a 445.5ha land with an estimated sales or gross development value of RM1.2 billion.

Financial Results …

For its second quarter ended Jan 31, 2009, the company group’s net profit fell 40.5% to RM5.5 million from RM9.3 million a year earlier, while revenue was down 35.6% to RM107.8 million from RM167.5 million.

The group’s lean balance sheet, supported by net tangible asset (NTA) per share of RM1.62 and low net gearing of 0.1 times as at end-January 2009 would help it weather the current economic situation.