KUALA LUMPUR: P.I.E. Industrial Bhd
said the improved supply conditions for key IC components, which had caused order fulfilment issues in the first quarter of 2024, have positively impacted EMS activities—comprising 80% of the manufacturing segment.
The electronics manufacturing services (EMS) company said the improvement has led to higher deliveries of supercomputing server products.
“More supply is expected to increase in the third quarter of 2024 and all the backlog orders are expected to be cleared by year-end. The group has dedicated both Plant 3 and Plant 5 for this supercomputing customer in anticipation of the increased orders,” PIE said in a filing with Bursa Malaysia.
The group is undergoing rationalisation to reduce orders from lower-margin customers to reserve the capacity and resources for higher-margin customers.
“The group has engaged a new customer specialised in servers and switches. In order to accommodate the new customer, entire 280,000 sq-ft Plant 6 is under major renovation and expansion to support the production capacity.
“Plant 6 is expected to be ready in 4Q24 for customer's audit and qualification and mass production is expected to begin in financial year 2025 (FY2025) upon full qualification. The group is in active discussion and optimistic to gain more new customers in the near future in diverse automotive, robotic, medical and telecommunication industries,” PIE said.
In the second quarter ended June 30, PIE’s net profit jumped 49% to RM17.3mil, or earnings per share of 4.46 sen against RM11.6mil, or 3.02 sen in the same quarter last year.
It said the higher profit was mainly attributable to a higher margin of product mix, lower administrative and distribution expenses and higher income from other investments.
Revenue, however, fell 16.1% to RM240.2mil from RM286.5mil last year.
PIE posted a higher net profit of RM27mil in the first half to June 30 on revenue of RM479.4mil.
The group has completed the installation of solar panels in four plants and is expected to complete a further two solar panels installation in another two plants for green electric energy generation which will mitigate the high rising electricity cost in future.
“Investment in solar panels will also entitle the group to enjoy green investment tax allowance. Meanwhile, the group also prioritises investing in various automation and process optimisation to improve the yield, efficiency, consistency and quality of products while minimising labour dependency,” it said.
PIE noted that the copper price has seen a good rally since the beginning of the fourth quarter of 2023 till to date.
“Our customers are gradually loading up on their orders in order to lock the price and avoid the risk of price hike. Nevertheless, this division is able to maintain its profit margin as the selling price quoted to customers is pegged to the copper price determined according to the market,” it said.
