This article first appeared in The Edge Financial Daily on October 30, 2019

KUALA LUMPUR: Globetronics Technology Bhd has joined fellow semiconductor players, ViTrox Corp Bhd and Unisem (M) Bhd, in reporting an earnings contraction in its latest quarterly results.

Its net profit fell 19.74% to RM18.94 million for the third quarter ended Sept 30, 2019 (3QFY19), from RM23.6 million for the same period last year, due to “lower volume loading of products from certain customers for the group”.

Earnings per share, accordingly, slid to 2.83 sen from 3.54 sen for 3QFY18.

Revenue was down 24.45%

at RM66.26 million versus RM87.7 million last year, its filing with Bursa Malaysia yesterday showed.

For the cumulative nine months ended Sept 30, Globetronics’ net profit slipped 37.3% to RM30.18 million from RM48.13 million last year, while revenue fell 35.96% to RM157.36 million from RM245.72 million.

The firm attributed the lower earnings for the period to a Japanese customer’s phasing out of certain matured products, and lower capacity use and volatile volume loading of certain products, especially in the first half of 2019.

But for the second half of 2019, Globetronics expects a strong recovery in its overall business and volume loading, based on current customers’ forecast.

“The group will continue to focus on escalating up the value chain and riding on research and development initiatives in new products’ design and development with our key customers moving forward,” said Globetronics.

Globetronics shares rose four sen or 1.85% to close at RM2.20 yesterday, with 5.83 million shares traded, valuing the company at RM1.47 billion.

The group is the third local semiconductor company to report an earnings decline since last week, when ViTrox said its 3Q net profit halved from a year ago and Unisem fell into the red during the quarter — its first quarterly loss-making quarter since 2013.

While Unisem incurred a net loss of RM3.21 million for 3QFY19 due to expenses arising from the closure of its Batam unit, PT Unisem, ViTrox blamed its disappointing performance on lower sales.