KUALA LUMPUR (May 17): PIE Industrial Bhd's net profit for the first quarter ended March 31, 2024 (1QFY2024) dropped 31.24% to RM9.7 million, from RM14.11 million a year earlier, due to reduced demand caused by shortages of major integrated circuits.

Earnings per share stood at 2.55 sen per share, from 3.67 sen per share a year ago.

Quarterly revenue fell 28.06% to RM239.18 million, from RM332.45 million recorded for 1QFY2023.

Despite reporting lower quarterly earnings, the company is positive on its outlook, after it secured a new customer specialising in servers and switches last month.

In a statement, the group confirmed that the new customer is expected to contribute an additional RM2.5 billion revenue to the group, of which RM1 billion will be recognised as early as next year.

Shares in PIE Industrial slipped eight sen or 1.36% to close at RM5.82 on Friday, giving the company a market capitalisation of RM2.24 billion. Even so, the stock has surged over 83% year-to-date, driven by the announcement of securing a new client.

“In order to accommodate the new customer, the entire 280,000 sq ft Plant 6 is under major renovation and expansion to support the production capacity. 

"Plant 6 is expected to be ready in the fourth quarter of 2024 for pilot production, and huge orders from the new customer are expected to be realised in FY2025 upon mass production,” PIE Industrial said in an announcement to Bursa Malaysia on Friday. 

The company’s main source of earnings is the manufacturing segment, of which 80% came from electronic manufacturing services.

In addition, PIE Industrial said it remains optimistic about engaging new customers from diverse industries, including medical, industrial, consumer and telecommunications.

"Regarding the raw wire and cable segment, orders are gradually increasing as customers are starting to place more orders. This division is able to maintain its profit margin as the selling price quoted to customers is pegged to the copper price determined according to the market,” it said. 

Meanwhile, revenue from the cable assembly and wire harness segment, operated by PIE Industrial's 55%-owned unit Pan International Electronics (Thailand) Co Ltd (PIT), is expected to increase.

PIT is expanding its manufacturing capacities and technical expertise to capitalise on new opportunities in the electric vehicle wire harness business, PIE Industrial added.