KUALA LUMPUR (Oct 24): Pantech Group Holdings Bhd has attributed a 7.5% year-on-year drop in profit to RM10.87 million for the second quarter ended Aug 31, 2018 (2QFY19) on suspension of carbon steel shipments to the US, and cautioned increasing trade protectionism could pose further challenges.

Revenue declined 5.8% to RM148.06 million, from RM157.10 million in 2QFY18.

In a bourse filing, Pantech said the shipment suspension arose from a preliminary affirmative anti-circumvention determination on Malaysia, which is still pending. As a consequence, its manufacturing division recorded a contraction in revenue and segmental profit before tax of 28.15% and 29.08% during the quarter.

Even so, the trading division which saw an increase in sales demand and delivery in local oil and gas projects, helped mitigate its softer manufacturing results.

Pantech declared a first interim single-tier dividend of 0.5 sen per share, payable on Jan 18, 2019.

For the cumulative six months, its net profit amounted to nearly RM25 million, down 2.8% against the same period in the prior year. Revenue rose 5.8% to RM326.45 million against RM308.60 million in 6MFY18.

Pantech said it expects its overall performance for the current financial year to remain satisfactory.

“The trade tensions around the world is turning open trade into a protectionist one and this in turn is posing major challenges to our export business and currently, the carbon steel manufacturing plant has suspended its export shipments to the US.

“Notwithstanding the above, the group sees opportunities to secure more orders from the increased activities in upstream oil and gas activities in Malaysia and Southeast Asia,” it said, adding it plans to expand its pipes, fittings, and valves capacity.

Pantech closed half a sen or 1.08% higher to 47 sen, valuing the company at RM348.50 million. Since the end of December last year, the stock has lost about a fourth of its value.