This article first appeared in The Edge Financial Daily on November 6, 2019

KUALA LUMPUR: Dufu Technology Corp Bhd’s net profit shrank 23.5% to RM14.78 million for the third quarter ended Sept 30, 2019 (3QFY19), from RM19.32 million for the same period last year, due to lower realised foreign exchange (forex) by RM1.6 million.

The hard disk drive (HDD) component maker also attributed its lower earnings to additional non-cash employee benefits arising from a share option granted under the employees’ share option scheme of RM1.2 million and higher depreciation charges of RM700,000.

In a filing with Bursa Malaysia, the  group  said revenue was almost flat at RM67.63 million versus RM66.9 million last year.

The group paid an interim dividend of two sen recently.

For the cumulative nine months, net profit slid 20.28% to RM29.41 million, from RM36.9 million last year. Revenue was down 4.51% to RM170.3 million, versus RM178.35 million.

Dufu is still confident about the longer-term outlook for HDD. “[Our] revenue has picked up as the volume loading by customers improved in the second half [of the year] and this is likely to continue towards end-2019,” said Dufu.

It said it will still improve its operational efficiency and keep a tight rein on costs to ensure price competitiveness of its products.