- SECOS Group (SES) delivered $7.9 million in sales for the December quarter, up 50.1 per cent on the December 2019 quarter
- The company also experienced a 178.8 per cent increase in biopolymer resin sales, a 169.2 per cent increase in compostable resin sales and a 192.6 per cent growth in compostable bag sales
- SECOS has ordered a new compound line to support a planned expansion of the compostable resin capacity in Malaysia
- Extra lines are in the process of being ordered and work is underway to expand the electricity supply
- Throughout the December quarter, SECOS burnt around $1.44 million in operating activities and used $443,000 in investing activities
- As of December 31, the company had $14.38 million in available funding, representing 10 quarters of use if spending levels remain the same
- Shares in SECOS are up a healthy 28.6 per cent and are trading at 31.5 cents
SECOS Group (SES) delivered $7.9 million in sales for the December quarter, up 50.1 per cent on the December 2019 quarter.
Importantly, the environmental stock’s December quarter sales represent a 34.2 per cent increase on the September quarter’s figures.
Sales
When COVID-19 restrictions eased, SECOS’ biopolymer resin sales resumed which saw a 178.8 per cent increase over the prior corresponding period (pcp).
This was the strongest quarter of biopolymer sales in SECOS’ history and biopolymer sales now represent 73.3 per cent of total sales.
Sales of compostable resin increased 169.2 per cent over the pcp, while compostable film sales grew 168.9 per cent over the pcp.
Compostable bag sales almost tripled over the December quarter, up 192.6 per cent over the December 2019 period and up 77.2 per cent over the September quarter.
Unfortunately, traditional film sales were delayed in some markets due to COVID-19 and an equipment issue on one production line. Repair is underway and SECOS expects output to return to normal by the end of January.
Operations
SECOS has ordered a new compound line to support a planned expansion of the compostable resin capacity in Malaysia.
Extra lines are in the process of being ordered and work is underway to expand the electricity supply.
Further, extra bagging and extrusion equipment was committed to keep up with demand for SECOS’ dog waste bags and compostable bin liners.
Financials
Throughout the December quarter, SECOS burnt through around $1.44 million with the majority going towards product manufacturing and operating costs.
The company also invested $443,000 in property, plant and equipment.
As of December 31, the company had $14.38 million in available funding, representing 10 quarters of use if spending levels remain the same.
Shares in SECOS are up a healthy 28.6 per cent and are trading at 31.5 cents at 3:14 pm AEDT.