MCE 2Q net profit jumps 232%, secures contract from Perodua

MCE 2Q net profit jumps 232%, secures contract from Perodua
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KUALA LUMPUR (March 28): MCE Holdings Bhd’s net profit for the second quarter ended Jan 31, 2022 (2QFY22) jumped 232.45% to RM3.27 million, from RM983,000 a year earlier, on higher revenue and improved operating efficiency. 

Earnings per share rose to 5.85 sen from 2.01 sen, the automotive electronics manufacturer’s bourse filing showed. 

Quarterly revenue increased 10.48% to RM26.59 million from RM24.06 million in 2QFY21, mainly due to higher demand for original equipment manufacturer products.

Despite the sharply higher quarterly earnings, MCE’s cumulative net profit for the first half of FY22 dropped 40.36% to RM1.57 million, from RM2.63 million previously.  

Six-month revenue shrank by 18.06% to RM43.39 million, from RM52.96 million. 

On prospects, MCE said it is cautiously optimistic that the automotive industry will have stronger recovery. It noted that the Malaysian Automotive Association has forecast a total industry volume of 600,000 units for 2022, a 17.9% increase over the 2021 figure of 508,911 units.

“The board remains vigilant but cautious in facing challenges that may arise from the unfolding war in Ukraine, which is already being reflected in rising oil prices, disruptions to supply chain and other market uncertainties, combined with extended labour and electronic components shortages, escalating raw material prices, and unfavourable fluctuation of foreign exchange rate,” said the group.

In a separate filing, MCE said its wholly-owned subsidiary Multi-Code Electronics Industries (M) Bhd has secured contracts to supply various mechanical parts for new Perodua car models with an expected RM11.47 million to be generated in revenue.

The project is expected to commence in 1QFY24 for a duration of six years, while MCE will be required to invest RM620,000 into the project. 

“The projects will not have any material impact on the earnings of the MCE Group for FY22. The projects are expected to contribute positively to the earnings of the MCE Group over a six-year period, commencing from FY24,” the group said.

At market close on Monday (March 28), MCE shares closed seven sen or 6.31% higher at RM1.18, valuing the group at RM66.27 million.

S Kanagaraju