KUALA LUMPUR (Nov 1): Greatech Technology Bhd's net profit for the third quarter ended Sept 30, 2021 (3QFY21) rose 24.75% to RM28.97 million from RM23.22 million a year ago, due to increased foreign exchange gain as well as lower administrative and marketing expenses.

Its quarterly revenue also grew 25.74% to RM95.33 million from RM75.82 million a year ago, Greatech's filing to Bursa Malaysia showed.

The group said the increase in revenue was attributable to higher revenue recognised in production line systems (PLS) and single automated equipment.

The most visible increase can be seen in the PLS for electric vehicle energy storage industry, which took a bigger cut in the current quarter PLS revenue with 65.76%.

The group also noted it recorded lower gross profit as its current quarter’s margin was mainly impacted by the higher freight costs and travelling expenses for the shipment, installation and commissioning of machines abroad as most of the revenue was derived from overseas.

Despite a lower gross profit, the group posted a higher profit before tax, primarily contributed from the increased realised and unrealised foreign exchange gain and a lower administrative and marketing expenses mainly attributable to the provision of employees’ incentive expenses recognised in the prior year's corresponding quarter.

The group did not declare any dividend for the latest quarter.

On a quarter-on-quarter basis, the group’s net profit fell 24.52% from RM38.38 million in 2QFY21, while its revenue slipped 30.08% from RM136.36 million.

For the nine months ended Sept 30, 2021, the group’s net profit surged 92.09% to RM113.97 million from RM59.33 million a year earlier while its revenue jumped 76.88% to RM326.83 million from RM184.78 million.

On prospects, the group said it is mindful of the risk of Covid-19 disruption and global supply chain issues leading to escalation in raw material and freight costs.

“Cost escalation has remained within our expectations. The group is working closely with our suppliers and customers to limit the exposure,” it said.

As of Oct 29, the group’s accumulated outstanding order book since the quarter ended Sept 30, 2021 stood at approximately RM426 million, and is expected to last until the second half of 2022.

Greatech said the increasing demand for clean electricity and clean energy goals adoption has fuelled the growth in demand for industrial equipment of solar and energy storage.

“The group’s order book in the third quarter showed positive improvement driven by the group’s solar customer focus on expanding its manufacturing capacity in America and India, and reducing environmental footprint.

“The group is ideally placed to benefit from this growth opportunity,” it said.

Greatech also said its significant near-term focus is maximising production to support the increased demand, including additional recruitment, increased manufacturing facilities, increased production capacity through new machines and broadening its supply chain.

“In response to this, the group is carefully managing the additional costs incurred in ramping [up] capacity,” it said.

Greatech closed eight sen or 1.12% lower at RM7.09, valuing the group at RM8.98 billion.