Monday 27 May 2024
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KUALA LUMPUR (Aug 11): Greatech Technology Bhd’s net profit for the second quarter ended June 30, 2021 (2QFY21) more than doubled to RM38.38 million from RM17.63 million a year ago, underpinned by strong revenue for production line systems (PLS) in the electric vehicle (EV) energy storage industry.

The group’s quarterly revenue also jumped more than twofold to RM136.36 million from RM56.22 million a year ago, its filing to Bursa Malaysia showed.

Earnings per share (EPS) also rose to 3.07 sen from 1.41 sen as a result.

According to Greatech, EV energy storage dominates the current quarter revenue, constituting 88.93% of the total revenue for PLS.

During this quarter, the group has recorded an overall increase in total revenue due to higher contribution from its PLS segment, which offset the decrease in revenue from single automated equipment (SAE) and provision of parts and services.

It added that the increase in profit before tax was driven primarily by the increase in gross profit of RM27.46 million, offset by lower other income of RM650,000 and higher administrative and marketing expenses of RM5.93 million.

The group did not declare any dividend for the latest quarter.

For the first half ended June 30, 2021, the group’s net profit grew more than two times to RM85 million from RM36.11 million a year earlier, while its revenue more than doubled to RM231.5 million from RM108.96 million.

EPS jumped to 6.79 sen from 2.88 sen.

Looking ahead, the group foresees improved demand driven by a continued uptick in activity in the end markets of solar thin film and EV energy storage to present attractive organic growth opportunities, supported by its strong local presence, consistent investment in technology and innovation as well as strategic expansion of its manufacturing capacities in Penang.

The group remains confident that it will continue to gain market share in the improving market conditions and deliver further improvements in the group’s second half financial performance.

The group, which continued to assess the capital expenditure spending as the year progresses, anticipated capital expenditure spending to be in the range of RM275 million to RM280 million, which is higher than the RM77.37 million announced on Feb 18.

This entails significant capacity investments to meet demand — which is expected to remain strong — as well as combined floor space of 1 million square feet by 2022, of which further details will be announced upon finalisation, said Greatech.

As of Aug 9, the group’s accumulated outstanding order book since the quarter ended June 30, 2021 stood at approximately RM206 million, and is expected to last until the first half of 2022.

The group is in the midst of finalising orders with customers and such orders will be expected to significantly replenish the order book in the next quarter, said Greatech.

According to the group, it has not been significantly impacted by the Covid-19 pandemic, except from near-term upward pressures on freight prices and logistical challenges due to global transportation capacities linked to the pandemic situation.

Moreover, during the first half of 2021, the group recorded significant improvements in its revenue and earnings, primarily driven by increased demand in the EV energy storage industry, which benefited from continued improvements in the end markets.

“While the group continues to experience inflationary pressure in certain raw materials and freight, the group has built up inventories and secured alternative means for certain critical parts,” it said, adding that the group has been through similar supply chain challenges before and is prepared for either eventuality.

Greatech closed five sen or 0.7% lower at RM7.05 today, valuing the group at RM8.89 billion. Year to date, the counter has risen 54.95%.

Edited ByLam Jian Wyn
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