Globetronics on track for another year of growth

By Goh Thean Eu August 6, 2014

Attributes performance to higher volume loadings, operation efficiencies, etc.
Sales from Malaysia and Singapore grew, sales from China and the US fell

Globetronics on track for another year of growth

GLOBETRONICS Technology Bhd, a manufacturer of semiconductor-based products, appears to be on track for another year of growth after posting a 22% increase in its second quarter net profit.

The company, in which Malaysian Technology Development Corp Sdn Bhd (MTDC) has an 18.45% indirect stake, registered a net profit of RM17.29 million in the second quarter ended June 30, 2014, compared with RM14.13 million in profit in the same quarter last year.

During the period, revenue rose by 5.6% to RM90.62 million. [RM1 = US$0.31]

For the first half, revenue increased by 6% to RM174.04 million while net profit jumped 29% to RM31.39 million.

The company, in its filing to Bursa Malaysia, attributed the improvements to higher volume loadings from most of its customers, better economies of scale, productivity improvements, and cost control programmes carried out by the company.

Looking at its segmented results reveals that earnings growth was mainly driven by customers from Malaysia and Singapore.

Revenue and pretax profit in Malaysia rose 4.8% and 25% respectively to RM113.44 million and RM24.75 million; while revenue and pretax profit in Singapore rose 16% and 100% respectively to RM53.65 million and RM10.84 million.

While sales and earnings jumped in these two countries, Globetronics’ business from China and the United States suffered.

During the first half, its China market registered an approximate 75% decline in both sales and pretax profit, while business from the United States saw a 57% decline in pretax earnings and a 5% decline in revenue.

“Moving forward, the group will continue to focus on escalating up the value chain and riding on R&D (research and development) initiatives in new product design and development,” Globetronics said in its filing to Bursa Malaysia on Aug 5.

“The group will also continue to step up efforts in improving efficiency and cost-reduction measures in its operations to achieve the necessary competitive edge in the market.

“Premised on the above and barring unforeseen circumstances, the group is optimistic of achieving better performance and growth in the financial year 2014.” It said.

Globetronics, which was founded by executive chairman Michael Ng Kweng Chong in 1991, currently operates from Penang and Petaling Jaya.

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