KUALA LUMPUR (July 28): MI Technovation Bhd’s net profit for the second quarter fell 28.5% to RM18.66 million, from RM26.11 million a year ago, due to expansion expenses, and higher material and logistics costs.

Revenue for the quarter ended June 30, 2022 fell 20% to RM93.58 million from RM117.29 million, the group said in a filing with Bursa Malaysia.

MI Technovation said the revenue was dragged by its semiconductor equipment business, mainly due to a slowdown in the smartphone and mobile device industry which is facing weakening demand from end users amid inflationary pressures.

For the cumulative six-month period, the group’s net profit grew 6.3% on-year to RM31.5 million from RM29.62 million, while revenue rose 6.5% to RM182.67 million from RM171.47 million.

Going forward, MI Technovation said the semiconductor equipment business will remain challenging, as industry players stay cautious on capacity expansion.

“Amidst the cost challenges stemming from interest rates hike, fluctuating currencies and inflationary pressures, the group is continually and cautiously evaluating any potential merger and acquisition projects that will provide synergistic value to its existing business pillars,” it said, adding that it is “cautiously optimistic” about the prospect for the remainder of the year.

Shares of MI Technovation, which fell over 50% year-to-date, closed unchanged at RM1.53 on Thursday (July 28), giving the group a market capitalisation of RM1.38 billion.