SAM Engineering's 3Q profit drops 24% as equipment segment slows

KUALA LUMPUR (Feb 22): SAM Engineering & Equipment (M) Bhd’s net profit fell 23.87% to RM19.19 million for its third quarter ended Dec 31, 2022 from RM25.2 million a year earlier, due to lower contribution from its equipment and aerospace segments.

Earnings per share slipped to 3.54 sen from 4.65 sen, the aviation engineering group’s bourse filing showed.

SAM said the lower profit from the equipment and aerospace segments was the result of start-up costs in Thailand, escalation of manpower cost, higher utility and interest expenses.

Quarterly revenue slid 1.11% to RM347.21 million from RM351.11 million previously, due to the decrease in revenue from the equipment segment, which was offset by higher revenue from the aerospace segment.

“For the equipment segment, the lower revenue was mainly due to decrease in demand from semiconductor customers offset with favourable foreign exchange translation.

“The higher revenue from the aerospace segment was mainly due to recovery of sales of engine casings and favourable foreign exchange translation,” the group said.

For the nine months ended Dec 31, 2022, SAM’s net profit grew 29.73% to RM69.66 million from RM53.69 million in the previous corresponding period. Earnings per share rose to 12.86 sen from 9.92 sen.

Nine-month revenue grew 40.44% to RM1.11 billion from RM788.72 million.

SAM believes that the demand for its single aisle products will continue to be strong with China's domestic air travel poised for recovery.

The group added that its expansion in Thailand remains on track.

SAM's share price closed four sen lower at RM4.90, valuing the group at RM2.65 billion.