Dufu Technology 3Q net profit falls 23% on lower realised forex

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KUALA LUMPUR (Nov 5): Dufu Technology Corp Bhd’s net profit shrunk 23.5% to RM14.78 million in the third quarter ended Sept 30, 2019 (3QFY19), from RM19.32 million in the same period last year, weighed down by lower realised foreign exchange by approximately RM1.6 million.

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

Earnings per share slipped to 5.8 sen, from 11.9 sen, the group's filing with Bursa Malaysia today showed. Its quarterly revenue was almost flat at RM67.63 million versus RM66.9 million last year.

The group paid an interim dividend of two sen in respect of the financial year ending Dec 31, 2019 (FY19), which was paid on Sept 25, 2019.

For the cumulative nine months (9MFY19), Dufu's net profit slid 20.28% to RM29.41 million from RM36.9 million last year, while revenue was down 4.51% to RM170.3 million versus RM178.35 million.

On prospects, the group is still confident in the HDD longer-term outlook. “Revenue has picked up since, as volume loading by customers has improved in the second half and this is likely to continue towards the end of the year 2019,” Dufu said.

The group said it will continue to improve its operational efficiency and keep a tight rein on costs to ensure price competitiveness on its products.

Thus, should there be no volatility in the US dollar currency against the ringgit, the group expects its earnings and growth to be satisfactory in the coming quarters, Dufu said.

Shares of Dufu closed 10 sen or 3.41% lower at RM2.83 today, valuing the group at RM725.36 million. Over the past year, the counter has rallied 65.4% from RM1.71.