KUALA LUMPUR: Sam Engineering & Equipment (M) Bhd said it expects reduced demand from planemakers this year and has started redeploying excess resources from its aerospace division to its growing equipment business.
"With airlines deferring and, in some cases, cancelling new aircraft deliveries, airframers have reduced their aircraft production rates by at least one-third in year 2020," it said.
"We began to see demand reductions as Aerospace customers reduce or push out demands."
The decreased demand of casing products for Boeing 737max and casing and aerostructures products for Airbus 320neo contributed to the company's lower profit in the fourth quarter ended March 31.
Net profit fell by a third to RM14.92mil compared with RM22.44mil made a year earlier.
Revenue, however, jumped to RM253.6mil compared with RM195.8mil previously.
The higher revenue was driven by its equipment business, with strong order from customers in the data storage and semiconductor industry.
"While the long term outlook for the aerospace industry remains positive due the fundamental drivers of air travel demand, there is uncertainty with respect to when commercial air traffic levels will begin to recover, and whether and at what point capacity will return to and/or exceed pre-COVID-19 levels," it said.
"On the other hand, the outlook for our Equipment business remains strong as we are supporting the essential products segment."
Over the last two months, Sam Engineering said the group's equipment division has been ramping up its production capacity to recover from previous mandated facility closures and support customers demand increase.
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