Dufu’s earnings in Q2 weighed down by forex losses

PETALING JAYA: Dufu Technology Corp Bhd’s net profits fell 5.4% to RM9.9 million in the second quarter ended June 30, compared to RM10.46 million recorded for the previous corresponding quarter, on the back of a larger unrealised foreign exchange loss of RM3.5 million and additional employee share option expenses during the quarter.

Revenue for the period rose by 37.7% to RM73.41 million from RM53.32 million reported previously.

For the cumulative period, Dufu recorded a net profit of RM24.04 million on revenue of RM136.36 million, from RM14.63 million and RM102.67 million respectively a year before.

The increase in revenue was mainly due to the increase in demand related to hard disk drive components, while the rise in profit was mainly due to the increase in revenue and share of results of associate’s profit.

For the period the group has declared a single interim dividend of 1.25 sen to be paid on Sept 25.

According to its Bursa filing, the group’s plants in Malaysia and China were affected by the Covid-19 pandemic but have since recovered.

It noted that the higher cost associated with the pandemic and the lower output from its Malaysian operations has dented its profitability for 2Q’20.

Moving forward, Dufu is concerned about the possibility of a global supply chain disruption risk which may temporarily impact the demand of its products and its customer’s product lines.

“We expect a better second half outlook for the group’s products in line with current orders in hand and thus, we are expecting that the group will be able to achieve satisfactory results in FY20, despite the above uncertainties,” it said.