KUALA LUMPUR (Aug 11): Mi Technovation Bhd saw its net profit for the second quarter ended June 30, 2023 (2QFY2023) rise 21.8% to RM22.73 million from RM18.67 million a year earlier, mainly underpinned by favourable foreign currency exchange.

As a result, its profit before tax margin expanded to 28.3% from 22.1% a year ago.

In a bourse filing on Friday (Aug 11), the group said its earnings per share (EPS) also increased to 2.54 sen from 2.08 sen.

It also declared a dividend of two sen for the quarter under review, payable on Sept 11.

The Penang-based semiconductor equipment manufacturer said the favourable foreign currency exchange was due to a strong greenback against a majority of Asian currencies, despite some losses from the disposal of obsolete assets.

However, its quarterly revenue dipped 10.18% to RM84.05 million from RM93.58 million in the corresponding quarter of the preceding year, attributed to lower sales from its semiconductor material business unit (SMBU) which saw its segmental revenue contract 18.7% year-on-year (y-o-y) to RM42.8 million compared to RM52.7 million the year before, owing to overstock issues at key customers that caused slower demand. The SMBU segment contributed 50.9% of the group’s total revenue.

Meanwhile, the semiconductor equipment business unit (SEBU) reported marginal growth of 0.7% in revenue on the back of higher service and spare part sales.

Operating profit-wise, the group said the 35.5% from RM11 million to RM7.1 million was a result of under-utilisation and absorption of fixed costs from its expansion plan in South Korea as well as Suzhou and Ningbo in China.

For a cumulative six months ended June 30, 2023, Mi Technovation’s net profit dropped 7.52% to RM29.13 million, from RM31.50 million while revenue dropped 11.92% to RM160.90 million, from RM182.67 million. 

On prospects, the group said that despite the complex set of challenges the semiconductor industry is currently facing, it remains committed to its long-term business strategy in reinforcing its position as a comprehensive solution provider to unlock growth in the market share through its news product deployment.

For SEBU, the group still sees its customers remaining cautious about capital expenditure spending. Nonetheless, with the introduction of new artificial intelligence (AI) enabled equipment platform for its mobility and wearables segment, it expects further contribution from this segment to the top line in 2023.

“The advanced multiple bin sorting and laser bonding technology for the high-performance computing (HPC) segment would form another significant revenue stream in the year. Our continuous pursuit to provide a multi-faceted solution for the power and automotive segment in the industry will push for its greater contribution to the group’s overall revenue,” it added.

For SMBU, it sees the momentum slowly building when most of its key customers are looking to launch their new products in the second half of the year. This scenario is seen remedying the lower demand in the first half.

Mi Technovation added that its mobility and wearables (smartphones, 5G and the internet of everything [IoE]), automotive and HPC segments will remain its priorities this year.

Shares of Mi Technovation gained three sen or 2% to close at RM1.53 on Friday, valuing the group at RM1.38 billion.