PETALING JAYA: KESM Industries Bhd’s net profit tripled in the second quarter ended Jan 31, to RM6.33mil from RM1.87mil a year earlier, boosted by the disposal of machinery and test equipment and gain on an investment in securities.
In a filing with Bursa Malaysia yesterday, the group said its revenue for the quarter declined marginally to RM67.96mil compared to RM68.09mil previously.
Its earnings per share for the quarter stood at 14.72 sen while net asset per share stood at RM8.42.
KESM is the largest independent burn-in and test services provider in Malaysia, and serves leading semiconductor manufacturers.
The group warned that the shortage of automotive chips in the global market posed a challenge for the company.
It said the Covid-19 pandemic has unexpectedly driven a strong demand for semiconductors in recent months, which resulted in a global shortage of chips.
Consequently, it said its customers are proactively procuring their wafer supplies.
“The semiconductor industry showed tremendous resilience in 2020 as it managed to grow in the face of a global pandemic.
“However, the current chips shortages have hit the automotive semiconductor market sector.
“This is challenging for our customers and ourselves, having to balance the volatility in production volumes, ” said KESM executive chairman and chief executive officer Sam Lim in a statement.
He pointed out that the various movement control orders to curb the spread of the Covid-19 pandemic posed another challenge to KESM’s cycle time.
Nonetheless, Lim said the group is confident that the disruptions in the supply chain faced by its customers are short-term.
“We continue to relentlessly support our customers with a faster return of the burn-in and tested automotive chips, ” he said.
Cumulatively, for the first half ended Jan 31,2021, KESM posted an 11% jump in net profit to RM7.10mil from RM6.40mil previously due to disposal of machinery and higher demand of its electronic manufacturing services (EMS) division.
Revenue for the period was lower by 8% to RM129.07mil from RM140.48mil previously as a result of lower demand for burn-in and testing services, but higher orders for EMS.
KESM said, according to a “leading semiconductor market research firm”, the worldwide semiconductor revenue was US$439bil in 2020, an increase of 6.5% from a year ago, and is projected to grow further by 6.8% to US$469bil in 2021.
“Looking ahead, we remain cautiously optimistic as the war on the pandemic remains unpredictable.
“Our performance for the first half of FY2021 has demonstrated our resilience and world-class execution capabilities, ” Lim said.
Shares in KESM closed 46 sen or 3.57% higher to RM13.34.