Poly Glass Fibre’s Q3 earnings down

PETALING JAYA: Poly Glass Fibre (M) Sdn Bhd’s net profit for the third quarter ended Nov 30, 2016 fell 71.2% to RM954,000 from RM3.31 million a year ago due to losses in its property development business, which has been suspended for a prolonged time.

The company explained that legal fees as well as land and building contributions had resulted in the losses for its property business.

Revenue, however, increased by 13.9% to RM12.50 million from RM10.97 million in the preceding year's corresponding quarter, due mainly to reversal of the interest of RM3.10 million previously provided by its wholly owned subsidiary Golden Approach Sdn Bhd in the court case filed by Tasja Sdn Bhd in the preceding year.

For the nine months period, Poly Glass' net profit dropped 59.1% to RM2.22 million compared with RM5.42 million in the previous corresponding period, with revenue jumping 18.7% to RM37.40 million from RM31.51 million a year ago.

Poly Glass said its fibre glasswool business is expected to be the major revenue contributor of the group in the immediate and near future.

The weak ringgit eases competition in domestic and export markets, while current exchange rate and a consistent low diesel price also bodes well for the company.

However, Poly Glass said the slowdown in the world economy and local property sector is expected to dampen demand. The move by the government to rationalise the energy subsidy will continue to increase natural gas tariff for the industrial sector and it will have a negative impact on the group’s bottom line.

"The management will continuously monitor the efficiency rate of gas furnace to minimise cost of production. Plant upgrades and additional warehousing space are also in the pipeline to optimise manufacturing capacity and control cost," it said in a stock exchange filing.