• Within Expectations – Reported core PATAMI of RM5.2m for 2Q16 and RM9.4m for 1H16, achievi ng 47% of HLIB’s forecast for FY16. Expect improving earnings in 2H16, driven by potential normalization in consumer spending amid defensive nature of F&B and FMCG segments, growing exports contributions amid still weak RM, lower effective tax rates, better efficiency, continuous new product innovations targeted at new and existing customers.
• Dividends: Declared net interim dividend of 2 sen (ex-date: 9 Sep; payment: 21 Sep) against 1.3sen in 1QFY16 (after adjusting the 1:2 rights issue), achieving 55% of HLIB’s FY16 forecast.
• YoY: 2Q16 revenue increased by 14.1% mainly attributed to the increase in demand from both local (+4.1%) and overseas customers (+24.2%). However, core PATAMI dropped 8%, mainly due to a 4.3% margin compression in PBT from increased cost of imported raw materials, higher energy and labour costs coupled with forex gains in 2Q15.

Source: Hong Leong Investment Bank Research - 29 Aug 2016