SCGP Reports a 23% NP Growth in 1Q21 with Higher Demand in ASEAN and Selling Price

SCG Packaging Public Company Limited (SCGP) has announced its 1Q21 consolidated financial statement through the Stock Exchange of Thailand as follows;

SCGP reported a net profit of 2,134 million baht in 1Q21, increased 23.24% compared to a net profit of 1,732 million baht in 1Q20. The increase in net profit was mainly due to an increase in total revenue from sales in the period which registered at 27,253 million baht, representing an increase of 12% YoY.

 

The total revenue from sales that increase was due to a demand growth in ASEAN customers, regional paper price improvement and the consolidation of Go-Pak UK limited (Go-Pak) – food service packaging solution providers in UK and Bien Hoa Packaging Joint Stock Company (SOVI) – corrugated container producer in Vietnam.

 

EBITDA was 5,267 million baht, increased 42% YoY with EBITDA margin of 19%, as SCGP has diversified consumer markets, and offered comprehensive packaging solutions to its customers through innovative and different products and services solutions.

 

SCGP stated that it had continuously expanded its business with its experience, expertise and collaboration with partners in different countries to be the leader in packaging solutions in ASEAN.

 

For organic expansion, SCGP started up a new production line of thermoformed barrier food packaging at Visy Packaging (Thailand) Limited (Visy) in March 2021 which increased by 347 million pieces or 15-20% of capacity supported by rising demand of processed/canned food. In addition, SCGP started commercial operation of packaging paper operated by PT Fajar Surya (Fajar) in April 2021 which added a total capacity of 400,000 tons per year to expand market coverage and better serve customers in Surabaya, Indonesia.

 

For inorganic expansion by mergers and partnership (M&P) strategy, SCGP announced the signing of a share purchase agreement in February 2021 to acquire a 70% stake in Duy Tan Plastics Manufacturing Corporation (Duy Tan).

Duy Tan is Vietnam’s top producer of rigid plastic packaging products, with B2B sales to multinational companies and local brand owners of consumer/FMCG products. This investment will strengthen SCGP’s capability to dually serve the FMCG producers and the consumers in Vietnam, with a full suite of product offering, both polymer-based and paper-based packaging. This transaction is expected to complete around second quarter of 2021.