CEO Morning Brief

Inari Amertron Net Profit Rises 29% in 3Q, Investing in New Product Line

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Publish date: Fri, 24 May 2024, 09:20 AM
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In the near term, Inari expects “continued positive results” for FY2024 from improvements in production capacity and utilisation, operational efficiencies and a strong US dollar.

KUALA LUMPUR (May 23): Inari Amertron Bhd (KL:INARI), Malaysia’s biggest outsourced semiconductor assembly and test firm, said on Thursday its net profit rose 29% in the third quarter from a year earlier thanks to higher loading volume and currency gains.

Net profit for the three months ended March 31, 2024 (3QFY2024) was RM73.72 million compared with RM57.36 million over the same period a year earlier, Inari said in an exchange filing. Revenue for the quarter surged 26% year-on-year to RM347.63 million from RM275.6 million.

Inari said its current business is “well positioned to benefit” from the anticipated introduction of artificial intelligence (AI) capable smartphones and the growth of high bandwidth optoelectronic devices in networks and data centers serving the AI market.

The company is also evaluating “opportunities for partnerships with semiconductor companies moving into Malaysia as a result of geopolitics and the US-China trade war,” the company noted.

Shares of Inari have gained about 8% so far this year, tracking a broad rebound in the technology sector from last year’s sharp decline. Semiconductor and related stocks, in particular, have rallied following the US' plan to double the tariffs on semiconductors imported from China.

In the near term, Inari expects “continued positive results” for FY2024 from improvements in production capacity and utilisation, operational efficiencies and a strong US dollar.

For its first nine months, Inari’s net profit slipped 4.6% to RM245.51 million versus RM257.22 million over the same period last year. The company blamed an increase in electricity rates as well as losses in work-in-progress items from unstable glitches in electricity supply from the grid.

The glitch has since been rectified, the company noted. Further, Inari flagged “short-term lower gross margins for new products in our push for revenue growth for the future”.

Inari added that it is currently investing in new technology and facilities, and setting up new product lines.

Shares of Inari slipped 0.6% to RM3.23, valuing the company at RM12.15 billion, ahead of the results announcement.

Source: TheEdge - 24 May 2024

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