Globetronics cuts payout to conserve cash

PETALING JAYA: Globetronics Technology Bhd has slashed its special dividend payout, citing the need to conserve cash as the company seeks opportunities to expand its business.

The stock declined 15 sen yesterday to RM6.20.

The company said in a filing with Bursa Malaysia that it is paying four sen a share to shareholders on top of a second interim payout of two sen a share.

“The rate of the single-tier special dividend declared is lower by three sen when compared with the rate of the special dividend declared for the corresponding period in the previous financial year, as the company needs to conserve cash for its capital expenditure and expansion,” it said.

This lifted its half-year payout to 10 sen a share, which is 33% lower than the 15 sen it had dished out in the same period in 2016.

For the first-half of the financial year ended June 30, Globetronics posted a 15% jump in net profit to RM11.7mil from RM10.2mil a year ago.

It has been reported that Globetronics is targeting to raise its total investment for this year to RM103mil from the RM85mil planned in the first quarter to meet the rising orders for its sensor products.

AllianceDBS Research said that Globetronics had only one customer for its sensor division, and the sensor products are also supplied to a single end-customer currently.

“However, the fact that Globetronics is included in its cus- tomer’s product road map suggests that the relationship is strong,” it said in a recent report.

RHB Research said that among the risks for Globetronics is about 55% of its 2018 revenue coming from its major Swiss customer and fluctuations in the foreign exchange, as it derives 40%-50% of its revenue in US dollars.

AllianceDBS Research said that in the near term, Globetronics’ share price performance is likely to track smartphone sales by the North American customer.