Here's how Goodpack managed to hurdle cost hike

Even as topline fell 4.2% qoq.

According to CIMB, 2QFY13 missed its forecast (20% of FY13) but met consensus (26%). 1HFY13 formed 44% of our FY13. CIMB raised its funding cost assumptions, which reduce FY13-15 EPS by 2-3%.

Topline rose 6.4% yoy but fell 4.2% qoq as box movement was slow in the quarter, which management blamed on lower demand from European and American clients.

On the flip side, Goodpack was able to keep cost inflation at bay through efficient route planning from its newly installed box management system. Interest expense also increased in the quarter as Goodpack geared up to fund box acquisitions.

Here's more from CIMB:

Margins remained stable on the back of efficient cost control. 2HFY13 should be better. Margins are likely to improve due to logistic cost savings from its global tender exercise, which began in this quarter.

Enquiries for boxes also picked up in January. Assuming that this translates into real demand, topline in 3QFY13 should pick up sequentially. Goodpack’s box acquisitions should help lift operating margins as box leases are more expensive. For autoparts, Goodpack plans to increase penetration in existing markets.

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