KUALA LUMPUR (Sept 18): KESM Industries Bhd (KL:KESM) slipped into the red in its fourth quarter ended July 31, 2024 (4QFY2024) with a net loss of RM977,000 versus a net profit of RM316,000 a year ago, as revenue fell amid lower sales from automotive chip processing.

It recorded a loss per share of 2.27 sen in 4QFY2024, compared to an earnings per share of 0.73 sen in 4QFY2023, said the world’s largest independent provider of burn-in and test services in a bourse filing. Burn-in is the process of stressing semiconductors to weed out potentially weak circuits.

The group's 4QFY2024 revenue fell 8.39% to RM56.52 million from RM61.69 million in 4QFY2023.

It declared an interim dividend of 7.5 sen — higher than six sen per share a year ago — payable on Oct 29.  

For the full FY2024, it made a net profit of RM188,000 versus a net loss of RM3.13 million a year ago, as revenue expanded 6.46% to RM243.03 million from RM228.28 million.  

“Our recovery was limited by global supply chain disruptions and fluctuating demand. This performance highlights the effectiveness of KESM's strategic focus and commitment to operational excellence, which enabled the group to navigate market volatility and shifting industry dynamics,” it said in a statement.  

Looking forward to FY2025, KESM anticipates rising demand for burn-in and test services.

“As we enter the new financial year, we remain optimistic regarding the opportunities ahead, particularly in the automotive, electric vehicle [EV], and power management markets supporting the AI [artificial intelligence] applications,” said its chief executive officer Lim Syn Soo.  

“By continuing to prioritise our customer needs, we are well-positioned to establish valuable partnerships with top-tier semiconductor manufacturers,” he added.  

The group, however, cautioned that ongoing trade tensions and semiconductor sanctions between the US and China are driving significant shifts in its customers’ geographic production strategies.

“China’s push for semiconductor self-sufficiency is set to disrupt supply chains,” it noted, adding the transition to EVs has ignited potential tariff wars among major world economies that may dampen a recovering automotive market in the near term.  

“We are working closely with our customers to remain agile, continuously adjusting our production plans to meet both challenges and opportunities,” it added.

Shares in KESM Industries fell 11 sen or 2.2% to close at RM5, bringing the group a market value of RM215 million. Year to date, the stock has dropped RM2.05 or 29%.