Financials
Quarterly Report For The Financial Period Ended 30 June 2024
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Unaudited Condensed Consolidated Statement Of Profit Or Loss And Other comprehensive Income For The Year Ended 31 March 2024
Unaudited Condensed Consolidated Statement Of Financial Position as At 31 March 2024
Review of Performance
The Group recorded a quarterly revenue of RM170.8 million in the 3-month ended 31 March 2024 (“1Q2024”) as compared to RM165.3 million registered in the 3-month ended 31 March 2023 (“1Q2023”), representing an increase of 3.3%.
The Group’s revenue was mainly contributed by the ATE and FAS segments, constituting approximately 42.6% and 57.3% respectively of the Group’s total revenue in 1Q2024.
The below outlined the revenue of the respective operating segments where elements of inter-segment transactions were included.
The following table sets out revenue breakdown by customers' segment for the Group:
The Group closed its 1Q2024 with a profit before taxation of RM30.8 million (1Q2023: RM34.3 million), representing a decrease of approximately 10.2%. The Group’s EBITDA (earnings before interest, tax, depreciation and amortisation) for the 1Q2024 stood at RM35.9 million (1Q2023: RM37.8 million), representing a decrease of 5.2%. Basic earnings per share for the period decreased from 2.99 sen in 1Q2023 to 2.72 sen in 1Q2024.
Performance of the respective operating segments which includes inter-segment transactions for the current quarter as compared to the previous corresponding quarter is analysed as follows:
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Automated test equipment
Revenue from this segment declined by approximately RM38.2 million from RM111.4 million in the previous corresponding quarter to RM73.2 million in 1Q2024 given the turbulence and uncertain recovery of supply chain disruptions besides slower-than-expected demand recovery in the inventory normalisation rate in the reporting quarter. Within the ATE segment, the Group’s automotive segment maintained the highest proportion with its revenue contribution of 60.3% in 1Q2024 which was largely driven by demand for the Group’s back-end test and assembly solutions from leading global automotive component players. However, revenue from this segment declined by 50.1% as compared to 1Q2023 due to the overall softness in demand within the automotive end market as a result of shifting consumer demands and the lack of transparency surrounding subsidies for the electronic vehicle markets globally.
On the contrary, the electro-optical industry accounted for 25.3% during 1Q2024, up from 6.6% in 1Q2023, a significant increase of 152.8% for this segment. This surge in revenue was mainly driven by the delivery of the Group’s flagship smart sensor test equipment for the upgraded version of the ambient light sensor. Meanwhile, revenue contribution from the semiconductor industry contributed approximately 13.4% within the segment, indicating a moderate decline from 13.8% achieved in 1Q2023.
Overall, the Group remains optimistic about the recovery and prospects of its ATE segment attributed to the Group’s diversified portfolio. This optimism is underpinned by the long term structural trends of automotive electrification, the growing influence of artificial intelligence, the expanding Internet of Things landscape and the evolving trends in opto-electronic devices. These trends are expected to provide substantial support and opportunities for growth within the ATE segment in the coming periods.
Profit before taxation in the ATE segment fell by 58.1% from RM27.8 million achieved in 1Q2023 to RM11.6 million for 1Q2024, mainly due to revenue contraction coupled with the increase in staff cost from direct and indirect labour category due to salary increment and increase in headcount.
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Factory automation solutions
After achieving double-digit growth for four consecutive years since 2020, this quarter marked a significant milestone for the FAS segment as its revenue surpassed the revenue of the ATE segment for the first time in the Group’s history. In 1Q2024, revenue from the FAS segment continued its impressive revenue growth trajectory with the increase of 69.4% to RM98.8 million as compared to RM58.3 million in 1Q2023, setting yet another record quarterly revenue for the FAS segment. This exceptional performance of the FAS segment was driven by the stellar growth of its medical devices segment which experienced a remarkable increase in its contribution rate from 35.4% in 1Q2023 to 80.2% in 1Q2024, representing an exponential growth of 310.5% within the segment.
The prominence of the medical devices segment is particularly noteworthy from the sustained demand and the significant growth potential for this segment. This potential is fuelled by technological advancements and prevailing trends in healthcare manufacturing that prioritise automation and innovation to achieve consistency, efficiency, precision and productivity in its production and operations. The Group has been expanding its customer base globally within this segment and actively seeking new opportunities to capture a larger market share. In 1Q2024, other industry segments contributing to the FAS segment were electro-optical segment and consumer and industrial products segment with each contributing approximately 10.1% and 9.6% respectively.
The demand for the Group’s proprietary intelligent Automated Robotic Manufacturing system (“i-ARMS”) has positively contributed towards the FAS segment driven mainly by the massive adoption of automation in the current post-pandemic environment in achieving efficiency and productivity. With the opportunity presented from the emergence of digital technologies, the FAS segment will continue to grow based on the current order book momentum, especially in the medical devices segment.
The FAS segment’s profit before taxation grew by 167.1% to RM23.6 million in 1Q2024 (1Q2023: RM8.8 million) mainly due to a substantial increase in revenue as well as the following factors:
- (i) favorable changes in product mix with better profit margin; and
- (ii) economies of scale achieved for projects undertaken.
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Smart control solution system
The products and solutions in this segment entail project management, smart building solutions and trading of materials.
In 1Q2024, this segment recorded a revenue of RM476,000 (1Q2023: RM83,000), while its loss before taxation stood at RM0.6 million in 1Q2024 versus a loss before taxation of RM1.0 million in 1Q2023. The lower loss before taxation in 1Q2024 was the result of higher revenue achieved during the quarter.
Prospect
With persistent inflationary pressure, geopolitical tension, government policies ambiguity and supply chain disruption, the Group entered 2024 cautiously with sustainability being its strategic priority underpinned by its three approaches of product diversification, geographical diversification and segment diversification. While the Group witnessed some degree of contraction in its current order book for the quarter, the Group, nevertheless, is optimistic in the second half of the year with some positive tailwinds appearing, especially in the new compound and high-performance semiconductor devices that are required in generative artificial intelligence, data centers and automotive segments. As it is, the medical devices segment still forms the largest share in the Group’s current order book and the revenue momentum, followed by contributions from the automotive segment, owing to the Group’s diversification strategy.
Simultaneously, the Group will also be focusing its resources on product development and talent upskilling in facing the start of a new cyclical upswing in the current technology market centering on artificial intelligence, automotive and medical devices. The Group remained steadfast in directing its investments towards strategic areas such as research and development, system infrastructure and manufacturing capacity in anchoring its foundation towards tapping these upcoming growth opportunities and solidifying the Group’s competitive edge in the market. While maintaining a keen eye on its current cost structure, the Group will continue to implement targeted cost control measures with efforts to maintain a skilled and stable workforce in navigating these economic challenges and fostering innovation.