All the profit seems to be in the inventory line which has increased substantially. Presumably this is in preparation for the move. It would seem that profit would be rather substantial without the inventory build-up. The painful thing about this company is that they don’t seem to have any interest in explaining what exactly is happening which may very well be good for the long term of the business. Perhaps the reality is more nuanced and much better than the dismal profit for the quarter would suggest on account of “increased costs”…

Large increase in purchases (presumably raw materials costs) under RPT: from 149 m to 203 m (12 month period).

Depreciation and amortisation increased as well but not significant in comparison.

I agree that management ought to put in more effort to explain what has happened. It’s not helpful to group all cost factors broadly together when their magnitude varies so greatly.

Points for management:

1. Is this a one-off aberration - pricing simply must be changed as this loss position cannot continue.

2. Will depreciation be increasing significantly in the coming quarters with the completion of the new plant - this will be a further burden on the financials if the mis-pricing issue is not addressed quickly.

3. Over RM325 m of shareholders’ funds have been allocated for the new plant. There needs to be more transparency on its progress (a deadline), and what its expanded capacity will be.

4. We are presumably nearing the move from the present Kuchai Lama premise to Bandar Enstek - there needs to be guidance on what will happen to the Kuchai Lama land (over 1.1 m square feet of valuable commercial land).

5. I appreciate that Aji Group owns 51% of the company, but there needs to be more effort to communicate publicly on the progress of the company.