Earnings per share for the period increase to 6.44 Singapore cents from 5.35 cents
CORRUGATED paper packaging manufacturer Tat Seng Packaging posted a 20.3 per cent increase in net profit to S$10.1 million for its first half year ended June 30, up from S$8.4 million a year ago.
This was mainly due to higher revenue from its China operations and increased finance income, the group indicated in financial statements released in a bourse filing late on Thursday (Aug 8).
Earnings per share increased to 6.44 Singapore cents up from 5.35 cents in the previous corresponding period.
An interim dividend of S$0.03 per share was declared for the half year, up from S$0.025 in the previous corresponding period. The dividend will be payable on Sep 20, 2024.
Revenue for the half year ticked up 0.7 per cent to S$127.2 million from S$126.3 million.
Revenue from the group’s China operations increased 1.9 per cent to S$1.9 million as a result of increased sales volume, but this was offset by competitive product pricing and the weakening of the yuan against the Singapore dollar.
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Revenue from its Singapore operations decreased 4.2 per cent to S$24.3 million on reduced selling price and reduced sales volume.
Gross profit was up 12.8 per cent to S$28.1 million due to higher sales volume from the company’s China operations, a reduction in raw material costs and lower production overhead cost per unit on higher utilisation in its Chinese facilities.
Finance income increased by 67.4 per cent or S$600,000 to S$1.6 million on increased interest income derived from fixed deposits and time deposits.
Looking ahead, the group said: “The excess capacity situation continues to dominate the corrugated packaging industry in China. Weak domestic consumption will also result in reduced demand for our products. These factors, combined with any increase in raw material prices, will have a direct impact on our profitability.”
It added that it will leverage on its competitive advantages of operational efficiencies, good quality and better service to overcome the impact of intense competition and weak demand.
Shares of the counter closed trading on Thursday flat at S$0.725 before the results update.
