KUALA LUMPUR (Sept 19): The US-China trade war has further dampened the earnings of KESM Industries Bhd, with its fourth quarter net profit down 79.75% to RM2.29 million from RM11.32 million a year ago.

Earnings per share for the quarter ended July 31, 2019 fell to 5.33 sen from 26.31 sen previously.

This is the sixth consecutive quarter that the burn-in and test service provider has seen a drop in its profit.

In a filing with Bursa Malaysia, KESM said the lower earnings were due to lower demand for burn-in, testing and electronic manufacturing services.

It blamed the market weakness on the tariff hikes imposed by the US and China against one another.

Quarterly revenue also came in 16.84% lower at RM70.91 million from RM85.27 million in the same period last year.

Nevertheless, the group proposed a final dividend of 6 sen per share, bringing the total payout for the year ended July 31, 2019 (FY19) to 9 sen, compared with 18.5 sen for FY18.

The poor quarterly performance also dragged the group’s full-year net profit for FY19 down by 84.05% to RM6.28 million, from RM39.34 million in FY18.

Earnings per share fell to 14.6 sen from 91.5 sen in FY18.

Revenue dropped 12.12% to RM307.38 million from RM349.78 million in FY18.

“The result is satisfying considering the anaemic health of the semiconductor industry,” said KESM chairman and chief executive officer Sam Lim in a statement.

The worldwide semiconductor industry is forecast to decrease in 2019 by 9.6% from US$475 billion in 2018 to US$429 billion, according to a leading industry research firm.

On prospects, Lim said: “We will continue to monitor and assess the evolving business landscape and maximize our position as the leader in selected market segments. Increasing profitability and shareholders’ value remain high in our priority.”

KESM shares price closed 15 sen or 2.11% higher at RM7.25 today, bringing the group a market capitalisation of RM311.86  million. Over the past one year, the counter has retreated by 57.85%.