Globetronics' 2Q earnings dive 64% on lower sales, forex loss

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KUALA LUMPUR (July 26): Globetronics Technology Bhd saw its net profit dive 64% to RM6.52 million for the second quarter ended June 30, 2016 (2QFY16) from RM17.93 million in the same quarter last year, as its Malaysia and Singapore segments saw lower sales and earnings.

The plunge in profit was in line with a 36% decline in revenue to RM57.41 million for the quarter from RM89.03 million a year earlier, Globetronics' bourse filing today showed.

"The lower revenue and net profit achieved in the quarter [were] mainly due to lower volume loadings from some of the group's customers as a result of reduction in end customers' demand and forex (foreign exchange) loss recognised, amounting to RM4.7 million," said the group.

For the first half of its financial year ending Dec 31, 2016 (1HFY16), net profit plunged 71% to RM10.2 million from RM35.08 million in 1HFY15, on the back of a 35% contraction in cumulative revenue for the period.

Going forward, Globetronics expects gradual recovery in the business and product loading towards 2HFY16, and said it will continue to focus on its research and development (R&D) initiatives.

"The group will continue to focus on escalating up the value chain and riding on the R&D initiatives in new products design and development with our key customer. This initiative is expected to result in the manufacturing of new products in the second half of the financial year," the semiconductor player said.

Globetronics closed 3 sen or 0.93% higher at RM3.27, giving a market capitalisation of RM921.76 million.