Pantech's 3Q profit jumps 70% on stronger demand amid economic recovery, pays 1.5 sen dividend

KUALA LUMPUR (Jan 12): Pipe maker Pantech Group Holdings Bhd’s net profit surged 70.22% to RM34.66 million for the third quarter ended Nov 30, 2022 (3QFY2023), from RM20.36 million a year earlier, as both its manufacturing and trading segments saw increased contributions on stronger demand amid an improving economy.

In a Bursa Malaysia filing on Thursday (Jan 12), Pantech, which makes pipes, valves and fittings (PVF), said its quarterly revenue climbed 43.28% to RM299.94 million from RM209.34 million in the corresponding quarter in FY2022. Earnings per share jumped to 4.22 sen from 2.66 sen.

The group declared a third interim dividend of 1.5 sen per share, with a Feb 27 ex-date, to be paid on March 24.

The group's manufacturing segment posted a 95.51% rise in profit before tax (PBT) to RM33.67 million from RM17.22 million in 3QFY2022, while revenue increased 30.05% to RM133.33 million from RM102.53 million. The segment's income was boosted by a better product mix, robust export demand and better margins in both its carbon steel and stainless steel divisions.

Meanwhile, Pantech's trading segment pencilled in a 34.36% increase in PBT to RM13.96 million from RM10.39 million a year ago, as revenue rose 55.98% to RM166.61 million from RM106.81 million. The higher revenue and segment PBT was mainly due to large projects secured from the increased activities in the oil and gas (O&G) sector, it said.

For the nine months ended Nov 30, 2022 (9MFY2023), Pantech's net profit expanded 81.02% to RM92.06 million from RM50.86 million, as cumulative revenue climbed 70.05% to RM840.61 million versus RM494.33 million.

On the group’s prospects, Pantech said robust oil prices are likely to bring positive impacts to its related capital activities — such as increased spending in facilities maintenance and upgrading activities in the O&G industry — which will improve the demand for the group's products in both the domestic and international markets.

Nevertheless, it noted that ongoing geopolitical conflicts, rising interest rate and inflation pose risks to the current economic recovery progress and the O&G demand.

“The group will prudently continue to focus on its existing revenue generating business and seek opportunities to grow its businesses, both locally and overseas, by enhancing its competitiveness as the major PVF solutions provider to the oil and gas industry’s related upstream and downstream industries,” it added.

Barring unforeseen circumstances, the group is optimistic about its FY2023 performance, in view of improving economic activities and O&G prices.

Shares in Pantech ended unchanged at 78 sen on Thursday, giving the company a market capitalisation of RM652.4 million.