KUALA LUMPUR (May 22): Packaging material maker Thong Guan Industries Bhd (KL:TGUAN) posted a 16% increase in first-quarter net profit, supported by improved performance from its plastic packaging product division as well as the food and beverages segment.

Net profit for the three months ended March 31, 2026 (1QFY2026) rose to RM20.77 million from RM17.89 million a year earlier, according to the group's Bursa Malaysia filing on Friday. Earnings per share increased to 5.3 sen from 4.49 sen.

Revenue slipped marginally by 0.53% to RM317.32 million from RM319.01 million in 1QFY2025.

The group declared a first interim dividend of 2.5 sen per share, payable on July 20.

Thong Guan said its plastic packaging products division recorded a revenue of RM271.21 million, down 2.4% from RM277.8 million in 1QFY2025, mainly due to the depreciation of the US dollar against the ringgit, which translated into lower average selling prices across its product range.

Despite this, the segment’s pre-tax profit increased 19% to RM17.29 million from RM14.52 million previously, driven by higher sales volumes in the stretch film and industrial packaging divisions.

Meanwhile, the F&B and other consumable products division posted a revenue of RM44.4 million, up by 7.7% compared with RM41.22 million a year earlier, while pre-tax profit improved 11.2% to RM8.64 million from RM7.77 million, supported by stronger sales volume and stockholding gains arising from higher coffee bean and tea dust prices.

Looking ahead, Thong Guan said the operating environment in 2026 is expected to remain challenging amid geopolitical uncertainties, fragile global demand, volatile financial markets and evolving trade and monetary policies across major economies.

The group noted that ongoing tensions in West Asia, particularly around the Straits of Hormuz, continue to pose risks to global energy security, supply chain stability, and the pricing and availability of resin and other petrochemical-based raw materials.

“Elevated freight and logistics costs, coupled with potential supply disruptions and longer procurement lead times, are expected to continue exerting pressure on operating costs and margins across the industry,” it added.

Nevertheless, Thong Guan said it remains confident of sustaining growth momentum, supported by resilient supply chains, healthy cash reserves and continued focus on operational efficiency and cost optimisation

On Friday, Thong Guan shares rose three sen or 1.97% to close at RM1.55, valuing the group at RM627 million. Year to date, the stock has gained 32%.