Thong Guan reports lower 1Q25 net profit

PETALING JAYA: Thong Guan Industries Bhd believes that the implementation of the minimum wage in Malaysia in the first quarter of this year has further added to cost pressures by increasing payroll and overall operational expenses.

In a filing with Bursa Malaysia, the plastic packaging manufacturer said it remains committed to cost mitigation through waste reduction, process optimisation, and improved operational efficiency.

“At the same time, the group will continue to expand its market presence across all business regions and explore new avenues for sustainable growth.”

For the first quarter ended March 31, 2025 (1Q25), Thong Guan’s net profit dropped to RM17.89mil from RM23.91mil in the previous corresponding quarter, while revenue dipped to RM319.01mil from RM344.65mil a year earlier.

Thong Guan said its plastic packaging product division registered a revenue of RM277.80mil as compared to RM307.41mil recorded in the corresponding quarter of the financial year.

“The 9.6% decrease for the plastic packaging product division was mainly due to lower average selling price (ASP) due to the depreciation of US dollar as compared to 1Q24.

“The food, beverages and other consumable products division recorded a revenue of RM41.22mil as compared to the corresponding quarter of financial year 2024 of RM37.24mil.”

Thong Guan said the increase was mainly due to the increase of sales of coffee, tea and instant beverage products.

Going forward, to navigate the evolving business landscape, Thong Guan said it will proactively adapt its strategies, leverage emerging opportunities and strengthen operational agility to sustain performance and maintain a competitive edge.

“Barring any unforeseen circumstances, the group is confident that it will continue to grow in the current financial year,” it said.

The board of directors has proposed an interim dividend of 4.5 sen per ordinary share for the current quarter ended March 31, 2025, to be paid on July 18, 2025 to the shareholders registered at the close of business on June 30, 2025.