KUALA LUMPUR (Oct 26): D’nonce Technology Bhd's net loss expanded by about 3.7 times year-on-year to RM5.98 million in its fourth quarter financial year ended August 31, 2016 (4QFY16), from RM1.58 million previously.

One of the major contributors to the loss for the quarter is a RM3.6 million fair value cost for the employee share option scheme (ESOS), mainly allocated to corporate expenses, the company said in a filing on Bursa Malaysia today.

“The other contributors are the slower than expected recovery by the subsidiary that was affected by fire in October 2013, and lower revenue from another subsidiary servicing the hard disk drive industry,” D’nonce said.

The weaker earnings came despite a year-on-year (y-o-y) rise in revenue from RM39.8 million to RM43.2 million.

Meanwhile, on a full-year basis, it recorded a net loss of RM10.42 million, compared with a net profit of RM397,000 in the previous year, as revenue fell 21.3% to RM176.02 million from RM223.77 million.

“The [fall in] revenue by RM47.7 million this year is mainly contributed by the surveillance system revenue recognised last year,” the group noted.

On prospects, D’nonce said the current global business sentiment remains challenging due to the prevailing global economic condition and foreign currency fluctuations.

Nevertheless, it said it will continue to “actively penetrate into other market segments as well as expanding its existing business to offset the impact.”

D’nonce was not traded today. It last settled at 28 sen on Oct 20, giving it a market capitalisation of RM49.61 million.