KUALA LUMPUR (June 22): Comintel Corp Bhd’s net profit for the first quarter ended April 30, 2017 (1QFY18) fell 53% to RM2.51 million from RM5.36 million a year earlier, as it registered weaker contributions from its manufacturing business.

Earnings per share dropped year-on-year from 3.83 sen to 1.8 sen. Quarterly revenue was down 16% to RM87.36 million from RM103.72 million, the group’s bourse filing showed.

Its manufacturing segment, which makes and assembles electronic components, saw net profit fall to RM3.2 million in 1QFY18 from RM6.9 million in 1QFY17, due to lower sales revenue and higher tax payable, as most of the tax credit had been utilised. Revenue dropped to RM85 million from RM101.2 million due to fewer orders from customers.

As for its system integration and mainteance segment (SIMS), net loss was reduced to RM700,000 from RM1.5 million a year earlier, despite a drop in revenue of RM100,000 to RM2.4 million, as a result of cost-cutting measures to mitigate losses in the segment, the group said.

On outlook, Comintel said it will continue seeking cost-saving and efficiency improvements, and new customers, while retaining long-term customer partnership and provide exceptional quality products.

“We hope demand for our products and services will return stronger in the second half of this current financial year,” it said.

The group also acknowledged the current global economic environment remains challenging amid geopolitical issues, inflation and volatile energy costs, which affected both customer demand and revenue from its manufacturing segment.

Our manufacturing segment’s revenue is very much dependent on the global demand of our customers’ products and any negative economic conditions could erode global consumer confidence and spending which will reduce the demand of our costumers’ products and therefore adversely impacted our revenue,” it explained.

As for the SIMS segment, Comintel said it will continue to reorganise and mitigate losses through cost cutting amid the softer demand experienced by the division in recent years, and aims to achieve breakeven for the segment in FY18.

For its renewable energy project in Kuang, Comintel said it has passed the technical test of the initial operation date (IOD) with Tenaga Nasional Bhd (TNB) and is currently arranging the power quality test with TNB to complete the IOD.

“We expect to complete the COD (commercial operation date) with SEDA in July 2017. Barring any unforeseen circumstances, we are expecting the FiTCD (Fit-in-Tariff Commencement Date) to be in August or September 2017,” said the group.

“We are hopeful with the commissioning of our advanced gasification green energy system at our Kuang plant, [it] will open a new corridor for us to tap on quickly the vast potential of the demand for our green energy generation system in the region,” it added.

Comintel settled 5.9% or six sen higher at RM1.07, valuing the group at RM149.8 million.