26.11.2020 (www.nst.com.my) - KUALA LUMPUR: Techbond Group Bhd (TGB) a homegrown pioneer in developing and manufacturing industrial adhesives and sealants, posted a revenue of RM22.0 million for its first quarter (1Q) ended 30 September 2020 (FY21), an increase of 13.6 per cent or RM2.6 million from RM19.4 million a year ago.

This was mainly attributed to higher demand and recovery of sales orders from both the domestic and overseas markets.

Industrial adhesives and sealants remained the group's primary revenue contributor, accounting for 92 per cent or RM20.3 million of total revenue with the remainder coming from the supporting products and services segment for the current quarter.

The group's gross profit margin improved to 32.3 per cent in 1Q FY21 versus 27.5 per cent in the same quarter last year, boosted by lower raw material costs as well as better product mix. Profit before tax (PBT) remained relatively stable at RM3.5 million compared to RM3.6 million last year.

The top-line improvement was not reflected on the PBT level due to unrealised foreign exchange loss amounting to RM1.2

million in 1Q FY21.

The unrealised forex loss is a non-cash item, hence, it has no impact on TGB's cash flow.

For illustration purpose, in the absence of the non-cash item, the adjusted PBT would have been RM4.7 million, which

would be the highest-ever quarterly PBT recorded in the group's history as a listed entity.

"We are delighted to have kicked-off our fiscal year with a solid start despite the challenging business environment.

"Demand and orders replenishment from both our local and overseas customers have been healthy. On the other hand,

our production has been operating at optimal capacity while in compliance with the standard operating procedures (SOP)," TGB managing director Lee Seng Thye said in a statement.

TGB's balance sheet continued to be lean and healthy as it remained in a net cash position, with net cash per share of 24 sen as at 30 September 2020, backed by net assets of 61 sen per share.

TGB board has declared a first single tier interim dividend of 1 sen per share for the current quarter.

Lee said over in Vietnam, the handover procedures for the company's new 30,000 square meters factory complex has been completed in October 2020 following the issuance of relevant certifications by the Vietnamese authority.

The manufacturing operations are expected to commence once the installation of machineries in the Vietnam Singapore Industrial Park 2 (VSIP2) factory complex has been completed and passed the plant acceptance test.

"Back in Malaysia, our collaboration with the Malaysian Palm Oil Board (MPOB) in pioneering palm oil-based industrial adhesives using locally sourced and sustainable palm oil continued to make good progress.

"Our ultimate aim is to commercialise the product as we see great potential in its demand. We expect the reception to this non-toxic palm oil-based industrial adhesives to be positive as consumers worldwide are increasingly more healthand environmentally-conscious when making purchase decisions.

"Looking ahead, we are cognizant of the taxing business environment. We will continue to monitor the situation closely and take necessary precautions to manage it.

"Our strong balance sheet plays a pivotal role as we navigate through these demanding times. All in all, we remain positive on our long-term outlook underpinned by the expansion plans we have in place. Barring unforeseen circumstances, the board opines that the financial performance of the group in the current financial year to be satisfactory," Lee said.

https://www.nst.com.my/business/2020/11/644490/techbond-revenue-jump-136pc-rm22mil-q1