Batu Pahat, 29 May 2019 – FY2018 was indeed an exciting year for the Group and to certain extent to the nation as well. Navigating through the ever dynamic and challenging business environment, the Group remained focused on improving its cost management, internal process efficiencies and productivity to deliver better business growth and performance in FY2018. The Group conducted extensive machine and equipment repairs and upgrading, focused on building employees’ skills set and competencies, improving on Quality Management System (QMS) in production and process audit for continued improvement to better serve our growing and ever evolving customer needs.

The Group has also been progressively investing into new machines and innovative technology, as well as embarking on continuous research and product development, to create the versatile, light weight, economical and 100% recyclable product which can help customers to improve their products’ safety protection and shelf life. As BPPLAS product primary function is for industrial packaging application, we develop and promote the premium grade Stretch Films to enhance on better load containment and holding force for palletised goods, so as to provide safety on road transportation and logistics and mitigate accident.

The Group has been advocating for right gauging in promoting our Stretch Films to our customers worldwide, and has managed to achieve consistent sales on our premium grade Stretch Films, while growing our High Quality Thin Gauge “Infinity” Stretch Films and PE Form-Fill-Seal (“FFS”) Food Packaging Film with printing in FY2018. For FY2018, the Group registered operating revenue of RM333.78 million, supported by a sustained and resilient local domestic consumption in Malaysia which saw sales increased by RM10.09 million (or 12.53%) to RM90.63 million (FY2017: RM80.54 million). On the other hand, export sales saw a slight decrease of RM4.87 million (or 1.96%) to RM243.15 million (FY2017: RM248.02 million) due to challenging global economic conditions arising from the on-going US-China trade war, combined with the continual intense competition and pricing pressure within the plastic packaging industry which saw further market consolidations

The Group achieved a higher PBT of RM25.03 million, an increase of 61.31% as compared to PBT of RM15.52 million in FY2017, mainly due to better product mix and production efficiency costs savings. PAT was also higher by 66.42% at RM21.36 million, compared to the PAT of RM12.83 million in FY2017 due to the improved profit performance as mentioned above, and lower effective tax arising from reinvestment allowance tax incentives claimed by a subsidiary.

The Group has always been committed to enhance shareholder value, and the Group’s dividend policy is to distribute at least 40% of net profits to shareholders annually, after taking into consideration the Group’s available cash and cash equivalents, projected capital expenditures and other investment plans. Despite high capex investment of RM25.6 million in FY2018, the Group had declared and paid out dividends of RM11.259 million (FY2017: RM7.506 million), representing a payout ratio of 52.7% (FY2017: 58.5%). The Group has been consistently paying out good dividends, with the dividend payout ratio for the past 5 years averaged at 71.4%.

At BPPLAS AGM held earlier today, Mr. Lim Chun Yow, the Managing Director also shared that the First Quarter results of FY2019 (“1Q19”) have been announced via Bursa LINK. For the 3 months ended 31 March 2019, the Group achieved a lower operating revenue of RM80.831 million, a decrease of 4.84% compared to RM84.945 million in the corresponding period last year. The lower revenue in 1Q19 was mainly attributable to lower product prices, as a result of from the lower resin polymer prices due to China and US trade tension. The Group achieved a lower unaudited PBT for the period under review of RM5.915 million, an decrease of 12.71% compared to unaudited PBT of RM6.776 million in the same period last year, due to higher electricity tariff and machinery upkeep costs. Unaudited PAT for the period under review was also lower by 4.31% at RM4.415 million, compared to the unaudited PAT of RM4.614 million in the same corresponding period last year.

Mr. Lim further shared that the Board of Directors has declared a first single tier interim dividend of 2 sen per share in respect of the financial year ending 31 December 2019. The entitlement date is fixed on 21 June 2019 and payment will be made on 4 July 2019.

The on-going and escalation of the US-China trade war tensions as well as commodity price volatility has affected the global and Malaysia economic growth. The Group would continue investing into latest technology and build people capability to deliver good and right quality products to serve our customers both domestic and globally. Another RM9 million capex has been allocated for new machine capacity and renewable solar energy investment in FY2019. With the additional capacity and capability to offer wider range of products, the Group is optimistic to deliver more products sales to fulfil our customer needs and requirement in primary, secondary and tertiary packaging, and deliver a profitable performance for the financial year ending 31 December 2019.

For more information, please contact:
Yvonne Chua, BP Plastics Holding Bhd.
Contact: 607-455 7633 E-mail: yifon.chua@bpplas.com