KUALA LUMPUR (Aug 24): Northeast Group Bhd (KL:NE) is considering acquiring an alternative site that already has the requisite licences and regulatory approvals, after the construction of its planned new factory to house additional computer numerical control (CNC) machines was "further delayed".

The Penang-based precision engineering components manufacturer said works on the new facility have yet to begin, pending the receipt of the necessary regulatory approvals, although its broader capital investment programme remains largely on track.

"The board is currently deliberating on the way forward, which may include either an updated construction timeline or the possibility of acquiring an alternative site with the requisite licences and approvals in place," Northeast said in its quarterly results filing with Bursa Malaysia on Monday.

The development marks another delay to the expansion that Northeast had initially set out in its listing prospectus prior to its ACE Market debut in October 2024. It had originally anticipated construction to begin in the fourth quarter of 2024, with commercial operations to begin in the first quarter of 2027.

Northeast had earmarked RM40 million of the RM84.49 million public-issue proceeds raised from its initial public offering for the new factory, with RM12.4 million set aside to purchase 36 new CNC machines. The planned facility was intended to provide about 79,020 sq ft of production floor space and accommodate around 200 CNC machines.

Meanwhile, Northeast updated that renovation works at another property in Penang remain targeted for completion by the third quarter of 2026.

For its three months ended June 30, 2026 (3QFY2026), Northeast's net profit jumped 38.8% to RM9.85 million from RM7.1 million, as revenue grew 35.3% to RM42.85 million from RM31.68 million.

The stronger performance was driven by higher demand and steady deliveries to its global customers across several industries, led by photonics, semiconductors and electrical and electronics (E&E).

For the nine months ended June 30, Northeast's net profit more than doubled, rising 118.5% to RM29.38 million from RM13.44 million, as revenue increased 41.8% to RM118.11 million from RM83.31 million. The improvement was supported by higher production volumes, better raw-material utilisation, improved manpower productivity, and higher sales of copper scrap.

"Given where we are positioned, we remain focused on expanding our production capabilities and strengthening our operational platform to support our future growth," said managing director Ng Chay Chin. "Paired with our upcoming new factory and warehouse alongside the ongoing renovation works to another warehouse, we are confident that these investments will reinforce our competitiveness and position us to capture the next phase of opportunities across the global precision engineering industry."

No dividend was declared with the latest earnings announcement.

Northeast shares dipped two sen to close at RM1.12 on Monday, valuing the company at about RM829 million. The counter has gained nearly 30% year to date.