Supercomnet ends FY2022 with record profit despite lower 4Q earnings

KUALA LUMPUR: , which makes medical devices and cables and wires for the medical, automotive and industrial sectors, saw its net profit dropped 23.1% to RM6.09 million for the fourth quarter ended Dec 31, 2022 (4QFY2022) from RM7.92 million a year earlier, due to delays from a supplier, inventory adjustment from one of its customers and unfavourable foreign exchange rate.

As a result, earnings per share came in lower at 0.8 sen for 4QFY2022 compared with 1.1 sen for 4QFY2021.

Revenue for 4QFY2022 was also down 9.3% to RM37.35 million from RM41.18 million a year earlier.

On the issue with the supplier, the group was unable to begin manufacturing one of its new products from its latest client because it received defective products from its US Food and Drug Administration (FDA)-approved supplier, said Scomnet in a statement with on Tuesday (Feb 21).

“The principal for this new product has urgently stepped in as it looks to resolve this issue with the supplier by the second quarter. Scomnet has also proactively been in talks with another FDA-compliant supplier to fulfil this required product,” it added.

Despite a weaker fourth-quarter result, Scomnet said it still managed to deliver record full-year net profit and revenue. For the 12-month period (FY2022), it posted a net profit of RM33 million, up 30.9% from RM25.21 million in FY2021. Revenue increased 10.2% to RM158.33 million from RM143.62 million.

Scomnet said the record FY2022 profit was a result of the group's growing momentum from existing customers, in addition to maiden contributions from new customers.

“The pipeline of Scomnet's orders remain strong and continues to increase.

“The automotive sector is also expected to increase its contribution in FY2023, especially for the fuel tank and wire harness segment,” it added.

“Organically, we are confident of our business prospects. Besides the pipeline of orders that we have in hand, our cash flow from operations continues to increase over the quarters. Financially, we have a lot of buffer, and thus are ready to grow our business through internal and external channels,” said Scomnet managing director James Shiue Jong-Zone.

“We remain optimistic with the group's mid- to long-term prospects and will continue to work closely with existing and new customers on new products development. Thus, barring any unforeseen circumstances, the group expects the performance for the next financial year (ending Dec 31, 2023) to be satisfactory,” he noted.

Scomnet shares closed down two sen or 1.44% at RM1.37 on Tuesday, giving it a market capitalisation of RM1.05 billion.

Source : The Edge Markets

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