Scientex Packaging: the 2024 AGM
This will be the fifth successive AGM which is virtual-only, and which moreover accepts questions only through chatbox. Given the disappointing performance of the company, after a few years of heavy capex in a sector of high potential, we hope that our fellow-investors will join us in asking questions at the meeting and encouraging renewed accountability by the directors and management.
Advance questions submitted for AGM
- Our company's sales fell 8% last year, & you attributed this to reduced demand in both domestic & export markets. Why is this? Which types of packaging are gaining share?
- Export sales in US$ fell 13% - & over the last two years, by 18%! Is our company keeping up with new product demands? What competitive changes are you noting?
- Can you please help us to understand the sales trends, as a function of volume or price, and the drivers of price?
- The 4Q report also attributed the profit slump to the product mix. What are the adverse changes in mix, & what is being done to reposition for profit?
- Freight costs soared in the first few months of this calendar year and have since fallen back. How is our company managing this volatility?
- Purchases from Scientex companies have soared in the last three reported quarters, to Jan Apr & July 24. Why?
- Payable days to Scientex companies have halved from 80 to 40 in FYjul24; were prices improved to take account of this faster payment?
- Our company reported challenges due to political uncertainties. Which political uncertainties are relevant to the demand or costs for flexible packaging?
- Investing in rooftop solar: how much power will be generated, will it be used directly in operations or sold to grid, & how will this affect group electricity costs?
- What is the budgeted capex for solar, timing of outlays, & payback period?
- What other capex is under consideration for the years ahead?
- What other initiatives are under consideration to regain growth momentum and improve profitability?
- Net debt is now almost zero, what is future dividend policy?
- Our Myanmar business achieved fairly steady sales & a small profit, despite the difficulties. How does the board view that business?
- Why is this the 5th successive AGM which is virtual only, rather than recommended modern practice of hybrid?
- Even with a virtual meeting, there is no need to restrict questions to the chatbox & stifle discussion, which might give the impression that the board and management do not consider themselves accountable to investors. "Continuous improvement" is a common ambition in manufacturing, & for all systems in forward-looking companies - can we please apply this to IR?
- Investor briefings were cancelled years ago with the excuse that managers needed to focus on the business. The financial performance was better in the days of open engagement. We request that quarterly briefings be resumed, be interactive, and be open to the whole investment community including analysts, and to both current and potential investors of any size.
Recent AGMs have been curtailed with the promise of written answers to questions yet to be answered, and partial answers were forthcoming many weeks later... unfortunately I can no longer find those Q&A records on the company or Bursa Malaysia websites? I apologise for not publishing on the 2023 AGM but here are our records of the 2022 AGM in which Scientex voted against the adoption of best-practice Malaysian standards in corporate governance, 2021's Christmastide AGM, and the failed 2021 attempt at a squeeze-out delisting. We'll hope for a better response to our suggestion of a new commitment to continual improvement - kaizen!
Claire Barnes, 15 December 2024