Update JCY returns to black with 9M net profit of RM93.4 million

by **Cals** Fri 22 Aug 2014, 01:24

Update JCY returns to black with 9M net profit of RM93.4 million

Business & Markets 2014

Written by Kamarul Anwar of theedgemalaysia.com

Thursday, 21 August 2014 18:45

KUALA LUMPUR (Aug 21): JCY International Bhd, the manufacturer of hard disk drive (HDD) mechanical components, posted a net profit of RM25.03 million in its third quarter ended Sep 30, 2014 (3QFY14), continuing its return to profitability in this financial year. In the previous corresponding quarter, JCY incurred a net loss of RM12.83 million.

JCY also declared a dividend of 1.25 sen per share, which is higher than its earnings per share of 1.23 sen for 3QFY14. In the previous corresponding quarter, JCY’s loss per share was 0.63 sen.

JCY’s filing with the stock exchange attributed the year-on-year rebound to bigger sales and improved efficiency. Its revenue for 3QFY14 stood at RM452.63 million, representing a 12.68% rise from the previous corresponding quarter’s RM401.69 million.

Explaining the revenue increase, JCY said it was mainly due to “higher quantities shipped, better average exchange rate of US dollar against ringgit and improved average selling prices in the reporting quarter”.

For the cumulative nine months ended Sep 30, 2014, JCY reported a net profit of RM93.38 million or 4.6 sen per share, on the back of RM1.41 billion in revenue. This compared with the previous corresponding period’s net loss of RM59.34 million or 2.92 sen per share, and sales of RM1.18 billion.

While the global demand HDDs continues to stabilise at around 140 million units per quarter, JCY said major computer manufacturers’ targeting emerging markets with sub-US$300 offerings, may spur additional demand.

Meanwhile, JCY cited industry reports that demand in servers will stabilise throughout the remainder of the calendar year 2014.

“The demand for gaming consoles is also likely to boost further HDD shipments, on the back of new gaming consoles — such as Microsoft Xbox One and Sony PlayStation 4 — and the recent decision by China to allow the domestic manufacturing of foreign game consoles,” the company said.

However, JCY said that raw material costs and foreign exchange rates may continue to affect its performance.

Thus, the company will continue to leverage on its competitive strengths of its economies of scale, multi-products, and increasing levels of automation in its manufacturing processes, to protect its profit margins.

Meanwhile, JCY said in another filing that its public shareholding spread (PSS) had dropped to 24.29% as at June 30, 2014, from its approved spread of 24.97%.

“At this juncture, the company has yet to formulate any rectification plan to address the said lower percentage, but will endeavour to formulate such plan and will explore various options available, to comply with the Required PSS and to increase the liquidity of its shares,” it said.

JCY’s stock has gained 21.13% from a year earlier, to close at 71 today. A total of 2.34 million shares were exchanged.