KESM Industries Q4 earnings jump to RM13.4mil

FY17 revenue crosses RM300mil mark

PETALING JAYA: KESM Industries Bhd, the world’s largest independent burn-in and test service provider, posted a 67% jump in net profit and generated higher margins for the fourth quarter ended July 31.

In a filing with Bursa Malaysia yesterday, the company said its net profit for the fourth quarter grew by 67% to RM13.4mil from RM8.1mil a year ago, driven by higher sales.

Its revenue for the quarter grew 20.5% to RM87.8mil from RM74.5mil previously.

This translated to a profit margins of 14.9% for the quarter compared to 10.8% in the same quarter a year ago.

Cumulatively, KESM posted record profits and sales for its financial year ended July 31, 2017 (FY17)

“2017 was a new milestone. We crossed the RM300mil revenue mark and achieved a record net profit of RM44mil.

“This achievement is a testament of our strategic position, the discipline of our management and the dedication of our employees,” KESM executive chairman and chief executive officer Samuel Lim said in a statement.

On a year-on-year growth, KESM’s net profit rose 43% to RM44mil in FY17 from RM30.7mil a year ago, on the back of 18% increase in revenue to RM338mil from RM285.7mil previously.

Its earning per share in FY17 stood at 102.3 sen a share compared with 71.30 sen last year. KESM has proposed dividend of 6 sen a share, which would increase its dividend payment to a total of 12.5 sen this year, higher than 7.5 sen it dished out last year.

As a tester for the integrated circuits (IC), KESM expects the growth catalyst for the semiconductor sector to be driven by the automotive industry moving forward.

Lim said increasing energy costs, minimum wage hikes and high expenses to meet stringent certification in operational standards were aggressively matched by a combination of significant improvements.

“Our management’s focus on productivity by utilising our assets at optimal performance, improvement in process quality and going the extra mile to make shipments that require urgency, all these have yielded this exceptionally good result,” he said.

Lim said that KESM was preparing its resources to focus on growth in the automotive segment of the semiconductor industry.

“Healthy car sales are likely to remain, increasing semiconductor sales as technology systems and complexity per vehicle increases. KESM is well-positioned for the upswing in the industry,” Lim said.

The global automotive semiconductor market is expected to reach an estimated US$45.9bil in sales by 2022 and is forecast to grow by a compound rate of 6.4% per annum over the next five years, according to a recent report by global market research firm Lucintel.

Shares of KESM, which have done very well this year, closed unchanged at RM15.06 yesterday.

Since the beginning of the year, KESM’s share price has risen more than 55%.