KUALA LUMPUR (Nov 8): PIE Industrial Bhd (KL:PIE) reported a 56.7% drop in net profit for the third quarter, primarily due to lower revenue from electronic manufacturing activities, coupled with foreign exchange losses, and higher administrative and distribution expenses.

The group’s net profit for the third quarter ended Sept 30, 2024 (3QFY2024) was RM8.84 million or 2.24 sen per share, compared to RM20.39 million or 5.31 sen per share in the same period last year.

Revenue for 3QFY2024 declined by 18.71% to RM244.5 million from RM300.8 million previously, according to its filing with Bursa Malaysia on Friday. 

This is the third consecutive quarter where PIE's revenue hovered around RM240 million, from RM290-300 million previously.

The group did not declare any dividend for the quarter under review.

For the cumulative nine months (9MFY2024), PIE Industrial’s net profit fell by 22.23% to RM35.85 million, down from RM46.09 million a year earlier, as revenue decreased by 21.3% to RM723.91 million from RM919.76 million.

Looking ahead, PIE Industrial said it is working to reduce orders from lower-margin customers. “The group is in active discussion and optimistic to gain more new customers in the near future in automotive, robotic, medical and telecommunication industries,” it said.

The group has also dedicated two plants for a customer linked to supercomputing products, and expects demand related to this product category to increase to support its electronic manufacturing services (EMS) segment.

Further, it has engaged a new customer specialising in servers and switches.

“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 4Q2024 for customer's audit and qualification and mass production is expected to begin in FY2025 upon full qualification.

Meanwhile, revenue from the manufacturing of raw wire and cable is gradually rebounding, as customers seek to secure prices amid a strong rally in copper prices since late 2023.

"Nevertheless, 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, the revenue derived from cable assembly and wire harness of Pan International Electronics (Thailand) Co Ltd (PIT) in Thailand is expected to increase, it said.

For PIT, construction of a new manufacturing block began in September, it added. 

At Friday’s closing bell, shares of PIE Industrial fell seven sen or 1.28% at RM5.40, giving it a market capitalisation of RM2.1 billion. The counter has risen over 69% since the start of this year.