KUALA LUMPUR (Aug 21): Thong Guan Industries Bhd’s net profit dropped marginally by 3.2% to RM20.9 million in the second quarter ended June 30, 2024 (2QFY024), from RM21.58 million a year ago.

However, its quarterly revenue came in higher at RM303.24 million, up 4.32% from RM290.69 million last year, on higher revenue contribution from its plastic packaging products and food, beverages and other consumable products, according to the company’s filing with Bursa Malaysia.

Thong Guan’s earnings were affected by higher selling and distribution expenses that rose 19% to RM9.39 million in 2QFY2024 from RM7.89 million a year earlier, and administrative expenses that increased by 2.7% to RM12.17 million from RM11.85 million a year ago.

Earnings per share dropped to 5.23 sen in 2QFY2024 from 5.51 sen per share in 2QFY2023.

It declared a first interim dividend of 2.5 sen per share, payable October 18. 

For the first half of FY2024, the packaging material maker’s net profit grew nearly 9% to RM44.81 million, from RM41.14 million a year ago, as revenue expanded 7.21% to RM647.89 million, from RM604.29 million a year before. 

Looking forward, Thong Guan said given the prolonged inflation in advanced economies and the continuation of geopolitical tensions, global market demand is expected to flatten.

“The group will continue its effort to reduce cost, manage its operational wastages, and increase productivity and efficiency,” it said.

The group will also continue efforts to expand its market share in Europe and the US, it added. 

Thong Guan said it is confident that it will continue to grow in the current financial year.

Shares in Thong Guan gained one sen to RM1.73 on Wednesday, bringing the group a market capitalisation of RM700 million.  Over the past one year, the stock has fallen 17%.