PETALING JAYA: The outlook for solid carbide cutting tool manufacturer HPMT Holdings Bhd
remains uncertain in the face of global manufacturing activity contraction, according to Hong Leong Investment Bank (HLIB) Research.
The rising possibility of energy supply disruptions and subsequent rationing in the European Union may serve to slow down demand in the near term, for companies in the manufacturing sector such as HPMT.
HPTM reported a 62.5% year-on-year (y-o-y) plunge in net profit to RM1.6mil for the third quarter ended Sept 30, 2022 (3Q22), which is also a 42.2% decrease when compared with the previous quarter.
Revenue for 3Q was RM22mil, a 9.8% decrease from the previous year.
HPTM’s net profit for the first nine months of 2022 was RM7mil, a 33.9% decrease y-o-y.
HLIB Research said the figure was at 64% of its forecast.
Due to lower margins, cumulative turnover was 1.3% lower y-o-y at RM67.9mil.
“We attribute HPMT’s lower quarter-on-quarter revenue to weakening demand for cutting tools in line with slowing manufacturing activities in key markets.
“While margins were compressed on the back of higher cost pressures, these were not fully passed on to customers, and there was the negative foreign exchange impact too,” said HLIB Research.
