ENG Teknologi Bhd expects to return to profitability this year after incurring a pre-tax loss of RM18mil in 2002, said chief executive officer Datuk Alfred Teh.
Our performance for the first quarter of the 2003 fiscal year is a very positive indication that we should return to profitability this year, he said after the company's AGM yesterday.
For the quarter ended March 31, Eng Teknologis pre-tax profit was RM3.8mil compared with RM2.3mil in the previous corresponding quarter. Turnover was RM32.5mil versus RM29.19mil previously.
Teh said the better profit was mainly attributed to improved sales, volume of production, and more broad-based customer allocations and cost improvements.
He said the group had also realigned itself with new key customers such as Hitachi, Emerson, Seagate and Sumitomo.
For example, the group recently obtained a contract to manufacture climate control devices for Emerson, a US-based company involved in the production of industrial products.
We will start production in July at our plant in Penang. The contract will generate RM100mil for the group over the next five years, he said.
Teh said the group had last year also launched new products such as over-mould actuators and fluid dynamic bearing components, which would help boost its 2003 revenue.
We also expect our operations in the Philippines, Hong Kong and China to contribute significantly to group turnover this year.
Last year, we only had six customers that contributed about 90% to the groups turnover, he said, adding that Eng Teknologi had since gained another six customers.
Teh is confident the data storage and semiconductor industries would see vast improvement in the second half this year.
The data storage and semiconductor industries of the country should expect foreign direct investment to flow in the second half 2003.
The weakening of the US dollar has made the ringgit more competitive and Malaysia attractive to foreign investors.
The outbreak of the Severe Acute Respiratory Syndrome in China has also prompted investors to rethink about investing only in that country, he said.
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