KUALA LUMPUR: Hard disk drive (HDD) manufacturer JCY International Bhd has returned to the black in its 4QFY11 with net profit of RM26.43 million due to the overall increase in revenues arising mainly from increases in the shipment quantity and a favourable US dollar exchange rate.
In the same quarter last year, JCY posted a loss of RM25.18 million. For the current quarter, its revenue dipped 1.5% to RM439.92 million from RM474.71 million while earnings per share were 1.29 sen compared with loss per share of 1.23 sen.
For the 12-month ended Sept 30, its earnings plunged 92% to RM14.55 million from RM173.76 million in the previous financial year. Its revenue fell 17.8% to RM1.67 billion from RM2.03 billion.
Despite high raw material and labour costs resulting from a shortage of workers, JCY said margins and net profit rose in the final quarter from improving its operational efficiency and effective cost management.
JCY, one of the largest global precision engineering manufacturers of HDD mechanical components, is fortunate as its facilities in Thailand were not affected by the recent flooding.
JCY said it continues to operate at full capacity in Thailand although the flooding has adversely affected the HDD supply chain, with Western Digital stopping production as well.
HDD vendors also have their factories in the flooded zone, and based on a recent media reports, HDD industry production in this coming quarter is expected to be about 50 million drives short of its 180 million target. As a result, average HDD prices have risen 20% to 30%, according to various reports.
JCY’s group chairman Dr Rozali Mohamed Ali said the results were satisfactory given the challenging business environment.
“We are very comfortable with our improvement in the operational efficiency, and we will continue to focus our efforts in improving our yields to maintain our sustainable profit improvement for the next financial year,” he added.
Rozali also said the company is currently taking a number of approaches to increase its output from its factories, including restructuring its production output and product mix, and accelerating expansion for its plants in China.
“We will continue to work closely with our key customers to meet their requirements for our HDD components over the next few quarters,” he said.
However, he added the biggest challenge facing JCY in Malaysia continues to be a shortage of labour which constraints its output. JCY has increasingly implemented automation for its production and this has resulted in the improvement of its output yield recently.
Moving forward, the company is optimistic that it will be able to improve its global market share and profitability despite the floods in Thailand severely affecting the global HDD industry.
JCY’s shares rose one sen to close at 76 sen yesterday with 15.5 million shares traded.
This article appeared in The Edge Financial Daily, November 30, 2011.
In the same quarter last year, JCY posted a loss of RM25.18 million. For the current quarter, its revenue dipped 1.5% to RM439.92 million from RM474.71 million while earnings per share were 1.29 sen compared with loss per share of 1.23 sen.
For the 12-month ended Sept 30, its earnings plunged 92% to RM14.55 million from RM173.76 million in the previous financial year. Its revenue fell 17.8% to RM1.67 billion from RM2.03 billion.
Rozali says the results were satisfactory given the challenging business environment.
Despite high raw material and labour costs resulting from a shortage of workers, JCY said margins and net profit rose in the final quarter from improving its operational efficiency and effective cost management.
JCY, one of the largest global precision engineering manufacturers of HDD mechanical components, is fortunate as its facilities in Thailand were not affected by the recent flooding.
JCY said it continues to operate at full capacity in Thailand although the flooding has adversely affected the HDD supply chain, with Western Digital stopping production as well.
HDD vendors also have their factories in the flooded zone, and based on a recent media reports, HDD industry production in this coming quarter is expected to be about 50 million drives short of its 180 million target. As a result, average HDD prices have risen 20% to 30%, according to various reports.
JCY’s group chairman Dr Rozali Mohamed Ali said the results were satisfactory given the challenging business environment.
“We are very comfortable with our improvement in the operational efficiency, and we will continue to focus our efforts in improving our yields to maintain our sustainable profit improvement for the next financial year,” he added.
Rozali also said the company is currently taking a number of approaches to increase its output from its factories, including restructuring its production output and product mix, and accelerating expansion for its plants in China.
“We will continue to work closely with our key customers to meet their requirements for our HDD components over the next few quarters,” he said.
However, he added the biggest challenge facing JCY in Malaysia continues to be a shortage of labour which constraints its output. JCY has increasingly implemented automation for its production and this has resulted in the improvement of its output yield recently.
Moving forward, the company is optimistic that it will be able to improve its global market share and profitability despite the floods in Thailand severely affecting the global HDD industry.
JCY’s shares rose one sen to close at 76 sen yesterday with 15.5 million shares traded.
This article appeared in The Edge Financial Daily, November 30, 2011.
