KUALA LUMPUR (July 25): Globetronics Technology Bhd saw its net profit for the second quarter ended 30 June, 2023 (2QFY2023) fall 37% to RM7.08 million from RM11.19 million reported in the corresponding quarter in the previous year owing to lower volume loadings and higher tax expenses.
Earnings per share (EPS) consequently also slipped to 1.06 sen from 1.67 sen posted the year before.
Based on a bourse filing on Tuesday (July 25), the group’s revenue dropped 34% to RM31.51 million in 2QFY2023 compared with RM47.85 million in 2QFY2022.
Meanwhile, the group declared a single-tier dividend of one sen per share — down from two sen offered in the same period last year — totalling RM6.7 million in respect of the current financial year, payable July 20, 2023.
The electronics manufacturer said the drop in revenue and net profit was due to lower volume loadings from certain customers and higher tax expenses totalling to RM1.8 million this quarter against RM600,000 the year before.
The decline in revenue were slightly offset by higher forex gains amounting to RM4 million as compared with RM1.3 million in the corresponding quarter in 2022.
For a cumulative six months ended June 30, 2023, the group recorded a lower net profit of RM10.38 million from RM20.64 million the previous corresponding period. Revenue was lower at RM64.64 million versus RM90.68 million a year ago.
“Southeast Asia and North America segment recorded sales decrease as compared to corresponding period last year,” the group expressed in a filing.
Globetronics’ manufacturing activities are performed in Malaysia while sales and distribution activities are mainly performed in two principal geographical areas namely Southeast Asia and North America.
The Southeast Asia segment reported RM13.2 million profit before taxation (PBT) while the North America segment saw a loss before taxation (LBT) of RM967,000.
In comparison to the six months ended June 30, 2022, the Southeast Asia and North America segments saw a PBT of RM20.78 million and RM340,000 respectively.
Looking forward, the group predicts the semiconductor industry to continue experiencing challenging macroeconomic and geopolitical issues resulting in uncertain end demand, rising inflation and manpower shortages.
“The group has taken measures and shall continue to strive to minimise any potential exposures or disruptions arising from these challenges,” they added.
Globetronics further commented that 2023 will be challenging and is expected to experience a decline in profitability for the remainder of the financial year.
“Several factors contributing to this decline include softer revenue forecasts from our customers, the full-year tax impact of our expired pioneer status in one of the subsidiaries, the full impact of increased minimum wages and increase in utilities costs,” the group expanded.
In a research note in May, Maybank Investment Bank (Maybank IB) maintained its “sell” rating on Globetronics at RM1.01 with an unchanged target price of 87 sen and said the group’s prospects remain challenging for FY2023.
The research house said that industry demand for consumer electronic wearables remained soft across the board with a near-term recovery unlikely, and added that customer concentration risk for the sensor business also remains a concern for Globetronics, with its Austrian customer being the sole revenue contributor at present.
As the closing bell rang, shares of Globetronics remained unchanged at RM1.60, valuing the group at RM1.07 billion.