KUALA LUMPUR (Feb 28): Cape EMS Bhd (KL:CAPEEMS) posted its second straight quarterly net loss of RM48.84 million for the fourth quarter ended Dec 31, 2024 (4QFY2024), hurt by weaker demand, allowance for expected credit loss and reduced gross profit margin. 

Its lower revenue and thinner gross profit margin stemmed from its customers’ cost down move for both industrial and consumer electronic products, particularly wireless communication equipment and electronic cigarettes respectively, the group’s bourse filing showed.

During the quarter under review, Cape EMS incurred an allowance for expected credit loss of RM33.5 million, amortisation of intangible assets of RM2.1 million and write down of slow-moving inventories of RM3.3 million during.

This marks the weakest result since the group was listed on Bursa Malaysia in March 2023. It posted a net profit of RM5.5 million on revenue of RM153.54 million in 4QFY2023.

Quarter-on-quarter, the group’s net loss widened from RM18.95 million in 3QFY2024, while revenue fell 37.4% to RM88.84 million from RM141.95 million.

No dividend was declared for the quarter under review.

On a full-year basis, Cape EMS logged its first annual loss of RM45.68 million for FY2024, compared to an annual net profit of RM44.38 million in FY2023.

Annual revenue was flat at RM551.84 million in FY2023 against RM548.64 million in FY2024.

Looking ahead, Cape EMS seeks to strengthen the performance of its existing business through product, customer and industry diversification in FY2025. The group has been focusing on power electronics-related segments, namely battery packs for home appliances, battery energy storage systems, power conversion systems and charging stations for electric vehicles.

The group aims to develop and grow in this huge and rapidly expanding sector, driven by the global push towards energy efficiency, electrification and renewable energy, it added.

Its cash and cash equivalents stood at RM82.76 million as at end-December 2024, a whopping 59% drop from RM202.93 million a year ago.  

Meanwhile, it had borrowings of RM225.45 million, up 37% from RM164.53 million during the same period a year ago.

Shares of Cape EMS closed half a sen or 1.8% lower at a record low of 27 sen, bringing the group a market capitalisation of RM268 million. The counter has fallen 70% compared to its listing price of 90 sen.