Pentamaster posts mildly stronger 1Q profit as factory automation business lifts

KUALA LUMPUR (May 11): Pentamaster Corp Bhd's net profit rose 4.3% to RM21.27 million for the first quarter ended March 31, 2023 (1QFY2023), from RM20.4 million a year ago, underpinned by a stronger factory automation solutions (FAS) segment.

Earnings per share grew to 2.99 sen from 2.86 sen, it showed in a filing with Bursa Malaysia on Thursday (May 11). Quarterly revenue climbed 13.2% to RM165.31 million from RM146.02 million, driven by an increased top line from FAS, which contributed 32.7% of total revenue. The remaining 67.3% came from the automated test equipment (ATE) segment.

The group did not declare any dividends for the quarter under review.

Pentamaster said the FAS segment enjoyed better profit in 1QFY2023 due to an increase in revenue, favorable changes in the product mix with better profit margins, and economies of scale achieved for the projects undertaken.

The ATE segment, however, had to make "major salary adjustments" that impacted its direct labour and indirect labour costs, and there was also some revenue contraction from delays in project delivery.

Based on a revenue breakdown by customer segment, Pentamaster said it sees strength in automotive and medical devices, which are benefiting mainly from intensified automotive electrification and the prevalent application of automation in medical manufacturing activities.

Automotive customers are the biggest revenue contributor to the group's ATE business, which it expects to continue to be the larger contributor to its total revenue, albeit at a lower degree — which the group said is in line with its ongoing effort in driving segmental diversification.

Demand from customers in the electro-optical segment, meanwhile, continued to be modest due to ongoing subdued volumes for smartphones, given the lack of new smart sensor development and the impact on consumer spending on such hardware upgrades.

“Both the semiconductor and consumer and industrial products segments see a trend of modest growth, and the group expects the proportions of revenue from these segments to remain consistent as the previous year,” Pentamaster added.

Its share price rose three sen to RM4.83 on Thursday, giving the group a market capitalisation of RM3.44 billion.