FX losses drags Inari's 3Q net profit down near 44%

by **Cals** Thu 19 May 2016, 00:04

FX losses drags Inari's 3Q net profit down near 44%

By Billy Toh / theedgemarkets.com | May 18, 2016 : 9:17 PM MYT

KUALA LUMPUR (May 18): Inari Amertron Bhd's net profit for its third quarter ended March 31, 2016 (3QFY16) fell 43.8% to RM21.4 million from RM31.8 million a year ago, primarily due to foreign exchange losses and an increase in depreciation charge.

Its revenue declined by 4.8% to RM217.32 million from RM228.29 million in 3QFY15. The lower revenue was mainly due to the reduction in the end user demand for the Group's products, its bourse filing showed.

Inari also proposed a third interim single-tier dividend of one sen per share, which will go ex on June 8 and be payable on July 5.

For the first nine months of financial year 2016 (9MFY16), the Group's net profit slipped slightly by 3.41% to RM108.34 million or 11.61 sen per share from RM112.16 million or 18.62 sen per share in 9MFY15, mainly attributable to the increase in depreciation charge.

Revenue for 9MFY16, however, increased by 15.9% to RM785.91 million from RM678.08 million in 9MFY15, mainly due to the foreign exchange fluctuation during the period under review.

Inari said, citing Gartner Inc in its April 2016 update, that the worldwide semiconductor revenue is forecast to total US$333 billion in 2016, a decline of 0.6% from 2015, due to weakened demand for key electronic equipment, elevated inventory levels, and the continuing impact of the strong dollar in some regions.

"During the third quarter, the ringgit strengthened about 8.4% against the US dollar. This impacted the financial performance of the group in 3QFY16. Since April, however, the US dollar has strengthened and is positive for the group.

"Nevertheless, the direction of the US currency will continue to impact the financial performance of the group for (the) rest of the financial year and beyond," it said.

It added that investments in new projects and partnerships will start to contribute to the revenue and profits beginning from financial year 2017.

"The group remains cautiously optimistic in maintaining our financial performance in line with industry members," it added.