KUALA LUMPUR (Nov 20): Packaging material maker Thong Guan Industries Bhd’s (KL:TGUAN) net profit shrank nearly one-third to RM15 million in the third quarter ended Sept 30, 2024 (3QFY2024), from RM21.9 million a year ago, dragged by lower contribution from its plastic packaging products' segment.

The segment registered a profit before tax  PBT) of RM15.6 million, down 39% from RM25.61 million, hit by lower average selling price and the appreciation of the ringgit against the US dollar.

Its food, beverages and other consumable products segment, meanwhile, recorded a PBT of RM3.69 million, up 42% from RM2.6 million a year ago, in tandem with higher sales, and lower average raw material cost as the ringgit appreciated against the US dollar, and higher selling price.

Quarterly revenue rose 3.77% at RM329.34 million from RM317.38 million last year on higher contributions from both segments, according to the company’s filing with Bursa Malaysia. No dividend was declared.

For the first nine months of FY2024, its net profit fell 5.13% to RM59.8 million from RM63.04 million, though cumulative revenue rose 6.03% to RM977.23 million from RM921.67 million.

Nonetheless, the group is confident it will continue to grow in the current financial year.

It also noted that a “rise in operating costs is inevitable, on increase in labour costs due to the adjustment of minimum wages and higher recruitment costs for migrant workers”, and said it will continue to mitigate these factors through continuous process improvement, automation, and operational efficiency.

Additionally, the group will focus on expanding its market share across all business regions, it said.  

Shares in Thong Guan closed down one sen or 0.65% to RM1.52 on Wednesday, bringing the group a market capitalisation of RM610.5 million. Year-to-date, the stock has fallen 19%.