KUALA LUMPUR (Aug 17): PIE Industrial Bhd reported a 35% year-on-year fall in net profit in its second quarter ended June 30, 2018 (2QFY18) to RM6.98 million from RM10.70 million, as it records lower revenue, lower margin, and provides for slow moving inventories.

This resulted in weakened earnings per share of 1.82 sen, versus 2.79 sen in the same quarter last year, PIE's quarterly earnings announcement today showed.

Quarterly revenue declined 20% y-o-y to RM141.62 million from RM176.07 million, due to lower demand from existing customers for electronics manufacturing services (EMS), raw wire and cable products and trading activities, which was partly offset by higher revenue recorded for its wire harness products.

Nevertheless, PIE said the decline in earnings were offset against lower administrative and distribution expenses, a reversal of impairment of trade receivables, and a higher foreign currency exchange gain during the quarter under review.

PIE's latest quarterly results bring its net profit for the first half of the year (1HFY18) to RM14.20 million, down 36% y-o-y from RM22.29 million; revenue was down 15% y-o-y to RM286.88 million from RM337.94 million.

Going forward, the group said it expects to see a steady increase of orders for its core EMS segment.

However, it said its performance may be impacted by the continuous shortage of certain electronics component, as well as any drastic fluctuation of ringgit against the US dollar, resulting in a flat full-year performance.

"Revenue derived from the manufacturing activity of raw wire & cable will continue to grow, with consistent profit margin in coming year, while that of the cable assembly & wire harness (3%) activities in Thailand will remain flat during the year.

"Nevertheless, [with] the newly set-up small-scale facilities for plastic parts and PCB assembly, the management believes this division is expected to explore wider market in Thailand from 4QFY18 onwards," it said.

Shares in PIE closed nine sen or 5.84% up at RM1.63 today, for a market capitalisation of RM625.99 million.