KUALA LUMPUR (Aug 21): D&O Green Technologies Bhd (KL:D&O), which makes light-emitting diodes (LEDs) for the automotive industry, posted its fourth consecutive quarterly net loss, weighed down by inventory impairment and foreign exchange losses.

Net loss for the second quarter ended June 30, 2026 (2QFY2026) stood at RM25.64 million compared to a net profit of RM689,000 in the same quarter a year earlier, according to the group’s bourse filing on Friday.

Revenue fell 5.2% to RM231.46 million from RM244.25 million, mainly due to weaker automotive demand, particularly in China, continued pricing pressure across the automotive supply chain and a stronger ringgit. Gross margin narrowed to 14.6% from 15.7%.

Net other expenses surged to RM36.66 million from RM4.79 million, mainly due to RM29.15 million in inventory impairment and RM3.53 million in foreign exchange losses.

For the first half of the year (1HFY2026), net loss stood at RM84.26 million compared to a net profit of RM1.04 million a year earlier, as revenue fell 5.8% to RM456.98 million from RM485.07 million.

Despite the losses, D&O said its operating performance improved quarter-on-quarter with gross margin recovering to 14.6% in 2QFY2026 from 4.9% in 1QFY2026. Normalised earnings before interest, taxes, depreciation and amortisation (Ebitda) rose to RM33.55 million from RM9.95 million.

The improvement was mainly driven by higher production utilisation, improved manufacturing efficiency and lower manufacturing costs.

D&O said the global automotive industry is expected to remain competitive in the second half of 2026 amid continued pricing pressure and macroeconomic uncertainties. 

However, global light vehicle production is expected to improve gradually from the first half, supported by improving production schedules in selected markets.

The group said it will continue implementing its Reset & Remodel programme, which focuses on manufacturing efficiency, material utilisation, cost management, automation and workforce productivity to improve operating performance.

“Barring any unforeseen circumstances, the board is cautiously optimistic on the financial results for the remaining quarters of the financial year,” it added.

Shares of D&O ended one sen or 2.74% higher at 37.5 sen, valuing the company at RM464.81 million.