Can-One 2Q profit falls 17% on lower contribution from general packaging division

TheEdge Fri, Aug 26, 2022 12:38am - 1 year View Original


KUALA LUMPUR (Aug 25): Can-One Bhd’s net profit fell 16.58% to RM40.73 million in the second quarter ended June 30, 2022 (2QFY22) from RM48.83 million in the same period last year, mainly on lower contribution from its general packaging division.

The group is involved in making metal and lithographed cans, plastic jerry cans, bag-in-boxes, and the manufacture, packaging and distribution of dairy and non-dairy products.

Earnings per share slipped to 21.2 sen from 25.41 sen previously, Can-One's bourse filing showed.

The group said the fall in the 2QFY22 net profit came after the general packaging division, which saw an increase in sales volume and sales mix, experienced lower depreciation and sales of previously impaired resins in the general cans segment.

This is in addition to higher administration expenses mainly due to depreciation of new server and stamp duty for trade bank facilities.

Can-One's revenue grew 14.33% to RM776.09 million from RM678.83 million in 2QFY21.

The general packaging division generated a revenue of RM738.9 million, an increase of RM100 million compared with 2QFY21, on changes in sales mix and revision of selling prices in tandem with increase in material prices.

Similarly, the revenue of the contract manufacturing division increased by RM21 million to RM41.8 million, mainly on the increase in sales volume.

However, the trading division registered a decrease in revenue of RM145.1 million to RM146.6 million, mainly due to lower export sales of aluminium cans to third party customers and transfer of sales of goods and purchases of materials back to Malaysia manufacturing plants, it said.

For the first six months of FY22, Can-One’s net profit rose 6.41% to RM88.96 million from RM83.6 million a year earlier, as revenue increased 14.84% to RM1.53 billion from RM1.33 billion.

Looking ahead, Can-One expects the operating environment to remain challenging due to global economic conditions and geopolitical tensions, including in Myanmar.

The key challenges faced by the group included volatility in raw materials costs and inflationary impact of all other materials and services costs, as well as volatility in foreign currency exchange rates, the group said.

This is in addition to increased labour costs and shortage of workforce and uncertainties arising from the variants of Covid-19.

Can-One’s share settled unchanged at RM3.90, bringing it a market capitalisation of RM749.4 million.

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