KUALA LUMPUR: Semiconductor company MI Technovation Bhd's net profit in the third quarter fell by 29% to RM12.32mil from RM17.41mil a year ago due to an increase in fixed costs for its new factory in Batu Kawan, Penang.
It announced on Friday the lower earnings were also also due to the payment of higher commission to external sales agent due to the change in geographical sales mix and foreign exchange (forex) loss due to the depreciation of the US dollar against the ringgit.
MI said its revenue increased by 35.8% to RM64.27mil from RM47.30mil. Earnings per share were 1.64 sen compared with 2.33 sen.
Its core business are manufacturing and selling of wafer level chip packaging sorting machines which can inspect and test for the semiconductor industry.
In the nine months, its net profit was slightly lower at RM40.80mil compared with RM41.66mil in the previous corresponding period.
The lower earnings were mainly due to increase in fixed cost on new factories at Bayan Lepas and Batu Kawan, higher R&D spend and commission payable to external sales agent compared with preceding financial period.
Its revenue, was however, higher by 31.3% to RM161.43mil compared with RM122.92mil.The increase in revenue mainly due to stronger demand from our customers in North East Asia region.
When compared to the the second quarter, there was 4% marginal increase in revenue due to continuous high demand from customers.
However, profit before tax fell by 33% mainly due to higher sales and marketing expenses in relation to Taiwan Semicon Exhibition in September 2020 and commission payable to external sales agent as well as foreign exchange loss.
On the outlook, MI said although the market may be affected in the short term as some capex decisions are deferred, it plans to fill up the capacity and the emergence of dual supply chain will benefit it eventually.
“We expect the market for semiconductor equipment to remain robust for the rest of 2020 spilling over to 2021.
“Most of the activities and inquiries have been from our North Asia market such as China, Taiwan and South Korea. We believe that these markets will remain vibrant for the coming years and we have positioned our group to capture the market through our regional technology centres in Taiwan, South Korea and China, ” it said.
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