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BUSINESS

Lower margin drags Greatech Technology's Q1 net profit down 38 pct

12/05/2022 07:47 PM

KUALA LUMPUR, May 12 (Bernama) -- Greatech Technology Bhd’s net profit fell 38 per cent to RM28.93 million in the first quarter (Q1) ended March 31, 2022, from RM46.66 million a year earlier on lower gross profit (GP) margin.

The automation solutions provider said its revenue, however, rose 7.4 per cent year-on-year (y-o-y) to RM102.16 million from RM95.14 million previously.

“The group recorded a lower GP and GP margin of RM35.21 million and 34.47 per cent, respectively, compared to RM49.38 million and 51.90 per cent, respectively, in the prior-year corresponding quarter,” it said in a filing with Bursa Malaysia today.

Greatech said the margin was mainly impacted by higher project expenditures as the new projects secured were in the fabrication and assembly stage and an increase in subcontract charges to ensure timely delivery of projects.

The company also noted that in last year’s corresponding quarter, it benefited from favourable GP margin mix realised from installation and commissioning revenue.

On the improved total revenue, it said revenue from the single automated equipment (SAE) as well as provision of parts and services (PSS) segments grew by RM11.32 million and RM0.68 million y-o-y, respectively.

“The increase in revenue for both SAE and PSS was primarily from the revenue generated in electric vehicle energy storage, driven by several orders secured in the third quarter of 2021 for invoicing in the early of 2022 and increased sales of parts and services.

“This was offset by a RM4.99 million decrease in revenue generated from production line systems due to the lengthening global supply chain which negatively impacted the cycle time of the projects,” it said.

On its prospects, Greatech said the supply-chain constraint would continue to put pressure on the industries.

“Despite the geopolitical tensions, persistent COVID-19 pandemic with renewed lockdowns in Shanghai, China, global supply chain constraint and increasingly inflationary environment, the demand for environmental and sustainability-related solutions have continued to benefit positively from the increase in investments driven by technological changes in the e-mobility and energy industry,” it said.

Greatech said the group was working closely with its suppliers to address the challenges and remained focused on executing its strategy for long-term profitable growth.

As of May 9, 2022, the group’s order book stood at RM467 million, which it expected would last until the first half of 2023.

-- BERNAMA


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