Here’s how SECOS (ASX:SES) made small profits 

  • February 23, 2021 05:00 AM AEDT
  • Tribhuwan
    Author Tribhuwan
    47 Posts

    Tribhuwan is an Analyst at Kalkine Media Pty Ltd. He writes on financials, consumers products, fast-moving consumer goods, emerging companies, and economic policy. In these areas, he also covers global businesses. He is a graduate in BCom (Hons) from...

Here’s how SECOS (ASX:SES) made small profits 


  • SECOS Group is leveraged to demand for sustainable products. The company recently posted profit of $66k in the first half. Moreover, its focus on biopolymer products has given earnings visibility.

SECOS Group (ASX:SES) has clocked profits in its first-half earnings report. SES offers sustainable packaging solutions. Its speciality, bioproducts sales delivered strong growth during the half-year period.

The company sells films, bags, and resins. In response to rising demand, SECOS is expanding capacity in its plants. First phase expansion in its China plant. Its products are sold in 20 countries. 

SECOS swings to profits 

In H1 FY21, its revenue grew 30.5% to $13.85 million from $10.62 million. Gross profit margin improved to 18.2% from 14.2% in H1 FY20. Likewise, the company posted a small profit of $66,000. 

Biopolymer sales accounted for 61.1% of revenue in the first half. Sales result was achieved despite the pandemic and supply chain constraints. The gross margin improvement was attributed to better plant efficiencies, increased utilisation, and economies of scale. 

But the firm also experienced margin compression stemming from FX impact, capacity expansion costs, and outsourced bags manufacturing to deliver risings orders. It expects further gross margin improvements and is focusing on higher-margin products. 

At the end of the period, it had a cash balance of $14.3 million. The company had raised $15 million to support working capital, expansion, business growth. Besides, a rising Australian Dollar also impacted reported sales because the majority of sales are in MYR, CNY, and USD. 

Road ahead 

SECOS Group has numerous patents supporting its market across jurisdictions. Its portfolio has 11 patent families related to thermoplastic starch-based biopolymer resin formulations

It is operating in the market, which is an alternative to single-use plastics. The rising acceptance levels of sustainable products will likely support a medium demand outlook.

Copyright © 2021 Kalkine Media Pty Ltd


SECOS is a vertically integrated business having a wide range of compostable products and resin. It has expertise in film production with the flexibility to adjust for tailored products. The company is driving marketing efforts and is looking for OEM partnerships. 

The company said FOGO initiatives by Australian Councils are driving new tender requests. It also bagged a US$3 million contract, while demand remains strong. MyEcoBag™ would be expanded through Woolworths and other retail chains. 

SES shares closed at $0.31 on Monday, 22 February 2021.


The website is a service of Kalkine Media Pty. Ltd. (Kalkine Media) A.C.N. 629 651 672. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.


We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK