Update Notion VTec gets stagnant order blues

by **Cals** Fri 15 Aug 2014, 00:53

Update Notion VTec gets stagnant order blues

Business & Markets 2014

Written by Foo Yen Ne of theedgemalaysia.com

Thursday, 14 August 2014 20:03

KUALA LUMPUR: Precision parts manufacturer Notion VTec Bhd (Notion VTec), finished its third quarter ended 30 June 2014 (3Q14) with its net profit plunging 96.9% to RM1.26 million from the RM40.13 million it recorded a year ago.

For the cumulative nine-month period to 30 June, the group registered a net loss of RM16.12 million, 18.6% lower than the RM19.8 million in profit it saw during the same time last year.

Stagnant orders across most of its business segments over 3Q14 have been blamed for the poorer results.

“The orders from all segments were static except for the auto parts segment showing increased orders,” said Notion VTec in an announcement to Bursa Malaysia yesterday.

It said its HDD segment was focused on enterprise, higher-capacity, multi-platter HDD configuration that utilizes more anti disks and spacers, while its notebook and personal computer demand has slowed down.

“The SLR camera [segment] is still affected by slower demand for interchangeable lens until consumer spending trends stronger,” it added.

It said only the auto parts sector has seen a resurgence of orders, mainly from customers asking for the electronic braking systems parts that are used for higher-end cars.

Revenue for the quarter is also lower at RM52.2 million, down 16% year-on-year from RM62.16 million, while its revenue for the financial year to date contracted by 11.1% from RM162.1 million to RM144.1 million.

The group’s basic earnings per share have also been shrunk 96.9% to 0.47 sen for the quarter under review, from 14.96 sen last year.

Despite a bleak third quarter, the group may be able to look forward to a better FY15 as the company is looking at a smart-phone co-manufacturing venture that it hopes will be launched in FY15 under an in-house brand.

It will also be supplying up to 500,000 machined glass parts per month for smartphones from early FY15, which is expected to positively impact its FY15 financials.

“The group is in transition with quick diversification into the consumer electronics segment of cellular phones going into FY15 while hoping for gradual recovery in the camera segment,” it said.

It assured investors that its earnings before interest, tax, depreciation and amortization will remain positive for FY14.