SINGAPORE (Feb 23): Tat Seng Packaging Group recorded a 40.2% increase in its FY17 earnings to $20.3 million, compared to $14.5 million in FY16.
Revenue for the full year ended Dec 2017 came in at $303.0 million, 32.6% higher than $228.5 million in the previous year.
The group’s revenue from its China operations was 35.9% higher, mainly due to its subsidiaries' ability to raise its selling price, especially for sales of corrugated board, and passing on the increased cost of raw material to its customers. The increase of revenue also partly attributed to higher sales volume.
The group’s revenue from its Singapore entities also increased by 14.3%, mainly attributable to higher demand in the biomedical & pharmaceutical and food & beverage industries.
Cost of sales was also 36.6% higher at $241.5 million from $176.8 million a year ago, bringing gross profit to $61.5 million, 18.8% higher than $51.7 million last year.
General and administrative expenses increased by 10.6% to $18.5 million compared to $16.7 million in the previous year, mainly due to higher staff incentive as a result of better performance and increase of related statutory fund contributions of China subsidiaries.
Other expenses more than trebled to $0.83 million compared to $0.23 million the same period last year, mainly due to exchange loss and impairment losses on property, plant and equipment.
Finance costs also increased by 21.3% to $1.26 million from $21.5 million last year, mainly due to the higher working capital requirement, in tandem with higher revenue.
The group has declared a final cash dividend of 2 cents per share.
On the outlook, Tat Seng says both Singapore and China's operating environment will continue to remain challenging with the uncertainty of macro-economic conditions, the volatility of raw materials prices and the competitive environment in the industry.
Nonetheless, the group will continue to execute improvement strategies in term of cost management, enhance operational efficiency and boosting productivity. It will also continue to invest and upgrade its machineries, improve staff skills and IT capabilities in order to achieve long-term competitiveness and to better serve its customers.
Shares in Tat Seng closed 2 cents higher at 80 cents on Friday.
