KESM hit hard by US car sales drop, virus pandemic
PETALING JAYA: Independent burn-in and test service company KESM Industries Bhd saw a net loss of RM3.28 million in its fourth quarter ended July 31, 2020 compared with a net profit of RM2.29 million a year ago. Revenue fell 35% to RM46.26 million from RM70.91 million, attributed to lower volume for burn-in, testing and electronic manufacturing services (EMS).
For the full year, its net profit dropped 98% to RM96,000 from RM6.28 million last year, while revenue was 22% lower at RM240.98 million compared with RM307.38 million previously.
Earnings per share fell to 0.2 sen from 14.6 sen in FY 2019. A final tax exempt dividend of 6 sen has been proposed to be approved at the group’s AGM on Jan 7, 2021.
KESM executive chairman and CEO Sam Lim said the significant drop in the US car sales and the impact of the pandemic hit the company hard.
“It is gratifying that KESM managed this unprecedented challenge remarkably well. We connected closely with our customers to coordinate their supplies and aligned our manpower and equipment resources to meet their fluctuations in daily production volumes. We remained a financially strong company despite an unfavorable macroeconomic environment. Our balance sheet remained healthy and our cash balance grew by 15% to RM230 million,” Lim said in a statement.
He added that KESM serves a diversified customer base. The ability to maintain five of the top 10 largest automotive semiconductor manufacturers in the world with consistent high quality and meeting their values, will continue to ensure its success.
“KESM’s business fundamentals are solid. We are in strong financial and market position. We will prudently invest on advanced equipment to build world-class capabilities serving the world’s premier semiconductor manufacturers in Malaysia.”
A leading research firm is predicting a decline of 2.4% in revenue of US$409.2 billion for the worldwide semiconductor industry in 2020 from US$419.1 billion in 2019.
“We remain confident that as the semiconductor industry picks up, our services will return to normalcy,” Lim said.