General Announcement

19/03/2004

NTPM HOLDINGS BERHAD CONSOLIDATED PROFIT FORECAST FOR THE FINANCIAL YEAR ENDING 30 APRIL 2004

NTPM HOLDINGS BERHAD

Type

Announcement
SubjectNTPM HOLDINGS BERHAD
CONSOLIDATED PROFIT FORECAST FOR THE FINANCIAL YEAR ENDING 30 APRIL 2004

Contents :

We refer to the above matter and our prospectus dated 17 March 2003.


The Board of Directors of NTPM Holdings Berhad (Company) wishes to announce that based on the current achievement and market environment as well as certain unforeseen circumstances beyond the control of the Group, NTPM Holdings Berhads consolidated results may fall short of the forecast results disclosed in the prospectus for the financial year ending 30 April 2004.

The details of the un-audited consolidated results for the financial period ended 31 January 2004 and the consolidated forecast profits for the financial year ending 30 April 2004 are as follows :-

Un-audited 9 months 31 January 2004
Forecast
12 months 30 April 2004 as disclosed in prospectus
RM000
RM000
Revenue
152,013
217,303
Consolidated profit before taxation and minority interest
26,924
41,302
Taxation
(5,855)
(6,616)
Consolidated profit after taxation but before minority interest
21,069
34,686
Minority interest
(60)
(39)
Consolidated profit after taxation and minority interest
21,009
34,647

The reasons for the expected shortfall are as follows:-

(i) Lower than expected revenue during the period

This was mainly due to the delay in market expansion to other ASEAN countries in particular Thailand and lower than expected production output.

Thorough research in respect of the legislation, rules and regulations for the expansion into Thailand had resulted in the delay in its implementation.

The lower than expected production output was mainly due to the delay in the delivery of the 3.4 meter rewinding machine purchased from Taiwan compounded by its inconsistent performance resulting in lower production output for toilet tissue products. The machine, costing approximately RM2.7 million, was scheduled for delivery in February 2003 but was delivered in June 2003. This machine which was commissioned in September 2003 incurred much downtime, which translated into lower production output, thus reducing sales for the period.

(ii) Higher advertisement and promotional expenses during the period

Additional advertising and promotional cost were incurred to enhance the brand awareness of the Groups new product, sanitary napkins, after receiving good response from the market.

Stiff competition encountered during the year by the entry of new player into the Malaysian tissue market and the repositioning exercise undertaken by an existing competitor resulted in the Group having to incur higher advertisement and promotional cost in order to maintain its market share.

(iii) Higher effective tax rate during the period

As disclosed in the prospectus, the NTPM Group intended to increase its production capacity by another 100 metric ton per day to 250 metric ton per day in the financial year ending 30 April 2004. The new plant and machinery was expected to be commissioned towards the end of the financial year. The investment will qualify for reinvestment allowance benefits from income tax based on 60% of the capital expenditure to be incurred and utilized against up to 70% of the statutory income in the year of assessment. The NTPM Group has included the said tax benefits in the preparation of the forecast for the financial year ending 30 April 2004.

Given the aforementioned experience with the 3.4 meter rewinding machine, much time and efforts were deployed in sourcing and evaluating the most appropriate plant and machinery which involves substantial capital outlay resulting in its delay in implementation and ability to realize the tax benefits of claiming reinvestment allowance for the year ending 30 April 2004.

The above variances resulted from situations which were unexpected and are unforeseen and beyond the control of the management.

This announcement is dated 19 March 2004.


Announcement Info

Company NameNTPM HOLDINGS BERHAD  
Stock Name NTPM
Date Announced19 Mar 2004  
CategoryGeneral Announcement
Reference NoCS-040319-67530

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