CEO Morning Brief

Genetec 2Q Profit Falls 26% Amid Forex Loss, Lower Margin

Publish date: Thu, 30 Nov 2023, 08:43 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Nov 29): Genetec Technology Bhd, which completed its transition to Main Market of Bursa Malaysia last month, saw its net profit fall 26.35% to RM18.45 million for the second quarter ended Sept 30, 2023 (2QFY2024) from RM25.06 million in the corresponding quarter a year ago, due to loss on foreign exchange and lower margin in product mix, despite higher revenue.

Earnings per share for 2QFY2024 dipped to 2.45 sen from 3.67 sen a year ago, the contract manufacturer of automated industrial equipment's bourse filing on Wednesday showed.

Quarterly revenue rose 2.57% to RM72.44 million from RM70.66 million a year earlier, driven by increased orders in the electric vehicle (EV) and energy storage segment.

In a statement, the group said it recorded a gross profit margin of 32% for 2QFY2024, down 12.4% from 2QFY2023.

For the six months ended Sept 30, 2023, its net profit fell 17.71% to RM35.83 million from RM43.55 million in the same period last year, though revenue rose 2.97% to RM148.14 million from RM143.88 million.

It should be noted that the group had changed its financial year-end to June 30, from March 30. It said the change was “to facilitate better management of resources for business operations and financial reporting".

On prospects, Genetec co-founder and managing director Chin Kem Weng said the group's current progress and strong pipeline indicated that the group is on track with its plans for the year.

“We have been working very closely with our partner to capture opportunities in the renewable energy segment through our battery energy storage system, MYBESS," Chin said in a statement.

“At the same time, Genetec is deepening and broadening our collaboration with key clients to ensure we continue to be their go-to supplier for their automation needs, and top-of-mind when it comes to new tenders and product development,” he added.

Chin also said the group is working hard to advance its solutions and MYBESS, and has rolled out MYBESS 2.0, a smaller form factor version for more efficient use of limited space.

“MYBESS 3.0 is in progress, which will incorporate artificial intelligence (AI) in the battery energy storage system, offering customers greater intelligence and convenience in managing and monitoring the health of the battery over time, optimising performance or damage prevention, and proactive servicing to ensure optimal performance,” Chin said.

On top of that, Chin said the group is strategically positioned to capitalise on EV trends.

“We are working closely with government agencies and are actively pursuing new ventures with global clients, engaging in discussions and developments that can yield revenue and exciting new projects for the company,” he added.

Genetec's share price closed five sen or 2.1% higher at RM2.43 on Wednesday, bringing the group a market capitalisation of RM1.88 billion.

Source: TheEdge - 30 Nov 2023

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