KUALA LUMPUR (Nov 29): Lower selling prices translated to ringgit constricted the performance of plastic packaging manufacturer Thong Guan Industries Bhd, as net profit fell 31.9% year-on-year to RM10.05 million or 7.37 sen per share in the third quarter ended Sept 30 (3QFY18).

Higher operating expenses such as freight charges, depreciation expenses and staff cost also contributed to the profit decline.

However, revenue inched up 2% to RM221.59 million.

Despite higher revenue, the food, beverages and other consumable products division recorded a loss due mainly to the operating losses from its restaurant operations and lower profit contribution from its tea products, Thong Guan said in a a filing with Bursa Malaysia.

For the cumulative nine months, net profit slipped 34.72% to RM27.16 million or 19.93 sen per share against RM41.6 million or 32.69 sen per share a year ago, while revenue rose 3.35% to RM642.51 million from RM621.66 million last year.

Thong Guan said the current trade war between US and China has reduced global trade and thus the growth of the plastic packaging sector, dampening customer sales volume.

The company said an additional stretch film production line is expected to be commissioned during the fourth quarter, and is confident of expanding its sales volume and revenue with the additional capacity coming on stream.

Thong Guan closed one sen or 0.4% higher at RM2.50 today for a market capitalisation of RM340.6 million. Over the past year, the counter has lost 39.29%.