KUALA LUMPUR (Nov 14): Sound system maker Formosa Prosonic Industries Bhd’s net profit for the third quarter ended Sept 30, 2019 (3QFY19) slipped 5% year-on-year to RM15.9 million from RM16.7 million, mainly dragged by higher operating costs, despite recording higher revenue.

The quarter under review's results had also included impairment loss on trade receivables that amounted to RM3 million.

Earnings per share slipped to 6.4 sen from 6.7 sen a year ago, according to the group’s filing with Bursa Malaysia. Revenue grew 36% to RM260.6 million from RM192 million, as it recorded higher sales volume following a change in sales mix.

For the nine months ended Sept 30, Formosa's net profit rose 8% to RM32.7 million from RM30.4 million in the year-ago period, as revenue grew 44% to RM590.9 million from RM411.5 million.

"The group recorded higher EBITDA of RM50.5 million for the nine-month period ended Sept 30, 2019, compared with RM42.6 million in the previous year's corresponding period, on the back of significantly higher sales of RM590.9 million compared with RM411.5 million, and also due to gain on foreign exchange. Nevertheless, the group's profitability was affected by increases in operating cost and impairment loss on trade receivables," it said.

Going forward, Formosa said its board is cautious about the operating challenges arising from fluctuations in the US dollar against the ringgit, rising material prices and labour costs as a result of the implementation of the minimum wage policy.

Having said that, the board expects to achieve profitable results for FY19 on the back of healthy sales orders.

Formosa's share price closed two sen or 1.25% lower at RM1.58, giving it a market capitalisation of RM390.83 million. The counter saw some 2.14 million shares traded.