Batu Pahat, 11 August 2020 – Despite a challenging business environment, accompanied by volatile market conditions, BPPLAS succeeded in delivering a strong performance in FY2019. This is mainly attributable to the Group’s strong focus on product innovation, cost rationalisation efforts and sustained capital expenditure investments. The Group installed and commissioned a brand-new Blown Film machinery to expand the Group’s market share in higher value-added products in food & beverage (F&B) Packaging Film, as well as to broaden the product range for flexible polyethylene packaging film. Apart from that, the solar panels project was fully installed in September 2019 and began contributing to the Group’s energy cost savings initiative via renewable solar energy power, generated through the solar panels.

The Group recorded marginally lower operating revenues of RM331.19 million, a slight decrease of 0.77% compared to RM333.78 million in FY2018. However, the Group’s sales volume was able to grow by 6.80% in FY2019 whilst sustaining pricing competitiveness. The Group also managed to achieve consistent sales on premium grade Stretch Films, whilst growing our high-quality Thin Gauge “Infinity” Stretch Films and PE Form-Fill-Seal (FFS) Food Packaging Film with printing in FY2019. The Group achieved a higher profit before tax (“PBT”) of RM26.35 million in FY2019, representing an increase of 5.25% as compared to RM25.03 million in FY2018. This increase is mainly due to betterproduct mixes, lower raw materials prices and costs savings generated by production efficiency.

Profit after tax (“PAT”) was marginally lower by 0.72% at RM21.20 million as compared to RM21.36million in FY2018, mainly due to a marginally higher effective tax rate in the current year. The Group’s effective tax rate in FY2019 was 20.40%, which is lower than the statutory tax rate due to availabilityof green investment tax allowance (“GITA”) claimable by a subsidiary for the solar panels project. The total dividends declared and paid by the Group for FY2019 amounted to RM11.26 million, representing 53.1% dividend payout ratio (FY2018: 52.7%). The Group has consistently paid out excellent dividends, with the dividend payout ratio for the past 5 years averaging at 63.1%. This figure
is higher than the Group’s dividend policy of distributing at least 40% of net profits to shareholders annually.

On 10 August 2020, BPPLAS second Quarter results of FY2020 (“2Q20”) have been announced via Bursa LINK. For the current quarter, the Group’s operating revenue of RM80.29 million was lower compared to RM86.71 million in 2Q19. The decline in revenue was attributable to lower product prices due to a suppressed commodities pricing environment. Nevertheless, the Group recorded historical highs for unaudited PBT and PAT, recording RM11.32 million and RM8.47 million respectively. These figures represent an increase of 82.94% and 87.16% compared to unaudited PBT and PAT of RM6.19 million and RM4.53 million respectively in 2Q19. The increase in unaudited PBT and PAT for 2Q20 was mainly due to better product mixes and improved production efficiencies despite the Movement Control Order (MCO).

Board of Directors has declared a second single tier interim dividend of 2 sen per share in respect of financial year ending 31 December 2020. The entitlement date is fixed on 3 September 2020 and payment will be made on 25 September 2020.

In relation with the impact of COVID-19, the Group’s operation in 2Q20 was partially affected by lockdown measures, both domestically and internationally. The Group’s plastics film manufacturing business is classified as an essential packaging supplier and the Group manufacturing facilities were already allowed to operate back in full since 29 April 2020. Social distancing, mask wearing, temperature screening and hygiene maintenance standard operating procedures (SOP) were and remain strictly adhered to under the current Recovery MCO (RMCO) period. For current year prospects, the Group is cautiously optimistic that the overall demand for its plastics packaging will remain intact. Incoming sales orders from customers are beginning to pick up gradually with the re-opening of economic sectors both in Malaysia and globally, despite weak consumer sentiment due to the continued spread of COVID-19. The Group’s diverse customer portfolio, comprising of customers from a variety of industrial sectors, have helped to sustain the Group’s business resilience. The Group continued the positive momentum in 2Q20 by recording RM80.29 million in sales, higher than the RM77.60 million sales figures recorded in 1Q20. This is attributable to the sustained demand for Food Packaging Film, Stretch Film and customised products produced by the Group are part of the critically required packaging in the Food and Supply Chain of Essential Goods. Malaysia is currently in the RMCO stage which is due to expire on 31 August 2020, subject to any further government announcements, as well as entering the recovery phase of the Government’s

PENJANA – Short-Term Economic Recovery Plan (ERP) to address the health and economic issues arising from the COVID-19 pandemic. Despite the uncertainties ahead, the Group is committed to play its critical role in the Food and Supply Chain of Essential Goods, in both domestic and regional markets, and aims to deliver a satisfactory and profitable performance for the financial year ending 31 December 2020.

For more information, please visit www.bpplas.com
For media enquiries, please contact:
Yvonne Chua, Financial Controller
Tel: 607-455 7633 or email: ir@bpplas.com