KUALA LUMPUR (Sept 8): Magni-Tech Industries Bhd's net profit for the first quarter ended July 31, 2020 (1QFY21) fell 12.3% to RM26.76 million from RM30.51 million a year earlier, as revenue dropped 10.8% to RM291.99 million from RM327.33 million.

The garment maker, which is also involved in the manufacturing and sale of flexible plastic packaging goods and corrugated cartons, said its financial performance for the quarter was considered "fairly satisfactory" given the pandemic-driven sharp economic contraction that had significantly impacted practically all business sectors across the globe.

Its garment segment, which contributed to over 90% of the group's revenue in 1QFY21, recorded an 11.4% drop in revenue to RM268.14 million. The segment is its main income-generating segment and accounted for 95.2% of the group's profit from operations.

The lower revenue, on top of lower investment income, resulted in lower profit before tax (PBT) for its garment segment, which fell 14.1% to RM33.33 million.

Its packaging segment, however, recorded a 32% rise in PBT — despite a 2.9% slip in revenue to RM23.85 million on lower sale orders — thanks to lower raw material costs.

The group declared a two sen per share interim dividend for FY21, to be payable on Oct 8. This is lower by 0.63 sen from the 2.63 sen it paid in 1QFY20, the group said, because of lower net profit and as part of the management's prudent approach to conserve cash in light of global economic uncertainties.

Moving forward, Magni-Tech expects its operating environment for the rest of FY21 to be challenging given the yet-to-abate Covid-19 pandemic, and uncertainties about the pace of economic and business recovery.

Magni-Tech shares closed three sen or 1.39% lower at RM2.13 today, giving it a market capitalisation of RM923.25 million.