Kobay’s 3QFY2023 earnings hit by slowdown in E&E sector

KUALA LUMPUR (May 17): Kobay Technology Bhd’s net profit contracted 47.6% to RM7.92 million in the third quarter ended March 31, 2023 (3QFY2023), against RM15.11 million in the same period a year earlier (3QFY2022), amid lower contributions from its manufacturing division.

Managing director and chief executive officer Datuk Sri Koay Hean Eng said in a statement that the group was not spared from the impact of softer demand from the semiconductor and electrical & electronic (E&E) industries.

However, he added that prior investments into property development and pharmaceutical & healthcare businesses have provided a diversified earnings base to withstand the slowdown.

The company’s earnings per share decreased to 2.47 sen from 4.92 sen, said the manufacturing and property group in its Bursa filing.

Revenue fell 26.4% to RM73.63 million versus RM100.07 million due to lower contributions from its manufacturing division, offset by higher contributions from its property development divisions.

For its manufacturing division, profit before tax (PBT) decreased to RM5.38 million from RM18.50 million, while revenue was RM44.24 million, nearly 34% lower against RM66.96 million in 3QFY2022.

PBT for its property development was three times higher at RM3.57 million from RM1.21 million, underpinned by higher revenue of RM10.82 million, from RM5.64 million.

For its nine-months of FY2023 (9MFY2023), net profit fell to RM27.47 million from RM39.35 million a year earlier (9MFY2022), on the back of lower revenue of RM245.22 million, from RM259.04 million.

Koay said the company will continue its efforts to proactively manage the situation, as challenges in the semiconductor sector persist.

“The group is working hard to sustain the existing demand from customers in the E&E industry.”

“Besides, Kobay is also broadening our clientele exposure for the two incubation projects, optimising our manufacturing footprint and enhancing our overall cost structure,” he added.

Kobay’s share price dropped one sen to RM2.26 on Wednesday (May 17), valuing the group at RM737.17 million.