All the machines that have been purchased for the military and aerospace projects have been commissioned and are operational. Current work-in-progress are on track and the machines are expected to contribute positively to the sales turnover and hence the bottomline of the SCF business segment for the financial year ending 31 December 2018.
Following on the announcement of the agreement signed with Tecore Synchem, Inc. on 19 December 2017 for the supply and sale of Tecore’s products, the project has now commenced. Samples of Tecore’s products have already been submitted to two of Cape and Oriem’s customers, which are multinational companies, for evaluation and testing.
For the financial year 2018, the group has planned to commission more stretch film production line as well as PVC food wrap lines, two more production lines. With the additional capacity coming on stream in year 2018, the Group is optimistic to continue its upward trend in sales volume and profitability.
As explained in the previous quarter’s Commentary on Prospects, we anticipate that similar performance conditions will remain throughout the remainder of this financial year, i.e. with reduced sales due to some delays in new product launches. However, as previously explained, going forward thereafter we anticipate positive performance as various new product launches roll out in FY18/19. Relationships with our global customer base remain very strong and we are blessed with considerable current and future
opportunity from both established and new business relations.
As stated in our prior report, the current volume of product development requirements is good from a new business perspective, but challenging from a resource and timing standpoint. However, following the structural changes within IQ’s R&D resources we are facilitating an acceleration of our new product development capabilities as we go forward.
This FY has proved to be very much a transitional year for IQ, but the future prospects and opportunities are positive from both an ODM and Own Brand perspective and we remain excited about the future.
“The special dividends will always continue because we have many [non-core] assets that can [be] monetised,” said Fernandes, adding that these assets include a 25% stake in online travel agency AAE Travel Pte Ltd, a joint venture with Expedia Southeast Asia Pte Ltd, logistics, cargo and food businesses.
On the back of envelope calculation, the low-cost carrier is getting some RM4.32 billion in cash from all the divestments. Excluding the sum for debt repayment, AirAsia has a sizeable cash pile for dividend payment.
Fernandes and Kamarudin are deemed to have interest in AirAsia through Tune Live and Tune Air Sdn Bhd. Tune Live, equally owned by the duo, holds a 16.73% stake in AirAsia, while Tune Air owns a 15.45% stake. Fernandes controls 48.33% equity interest in Tune Air, while Kamarudin 40.23%, and Abdel Aziz @ Abdul Aziz Abu Bakar holds the remaining 10.94% stake. Tune Live and Tune Air are the largest shareholders of AirAsia.
GDex believes that the proposed acquisition is a very strategic move for the group to venture into the retail delivery service sector. MBE Malaysia’s 92 outlets would strengthen GDex’s current network of 79 branches nationwide. MBE Malaysia’s outlets are mainly operating in business districts and shopping malls, which provide great accessibility to business, retail and e-commerce customers.
With the in-house PCBA capability, SKP Resources is expected to enjoy a wider profit margin and earnings growth will be broadly in line with other EMS players. SKP Resources currently sources PCB parts from other EMS players.
SKP Resources’ in-house PCBA capability could eventually turn into an integrated one-stop EMS service provider and enhance the group’s chances of bagging more contracts from its major customers, commented Kenanga Investment Bank Bhd analyst Desmond Chong in his latest financial result review last Friday.
Notion VTec executive chairman Thoo Chow Fah told The Edge Financial Daily that he hopes to see the automotive segment grow by 30% to 40%, and the HDD segment to grow by 5% to 10% this year. Besides that, he said Notion VTec is currently working to secure at least two new clients from Singapore, to provide parts for the contract manufacturers, involving the production of scanners. “We hope to sign the deal with these two potential clients within the next two months,” he said.
In its filing with Bursa Malaysia last Friday, the company said the fall in revenue was mainly attributable to reduction in sale orders following the fire, where HDD, auto and engineered products posted lower sales of 4%, 26% and 14% compared with the preceding quarters respectively. The Oct 20 fire broke out, apparently from a ventilation fan, spreading to the roofing, at its manufacturing plant in Jalan Haji Salleh in Klang. The company said the fire affected more than 552 computer numerical control (CNC) machines and work-in-progress goods, and also the quality control building. Instantly, Notion VTec’s production capacity was down by 40%.
“We have torn down the building, and are currently in the phase of rebuilding a new factory, which should take us to another nine months or so. In the meantime, we have rented four factories nearby as well as utilising all the space we have in our other factories in Johor and Thailand to reach our production level,” Thoo said, adding that the new plant is expected to be fully operational by 2019.
“During the quarter under review, we had as low as 1,500 workers and this had impacted us as we needed more workers to start our new factory [which was completed in August last year]. This resulted in a backlog of orders to fulfil, which impacted our production efficiencies,” Yoong told The Edge Financial Daily via an email response. Currently, HeveaBoard has about 1,900 workers.
“The management highlighted that the group hedges its 40% sales proceeds to mitigate the risk of forex fluctuations. With the recent sharp rally in the ringgit against the US dollar, that is, from as high as 4.40 in the fourth quarter of 2017 to the current 3.90, the management acknowledged that the negative impacts on the group are unavoidable with the time lag of about two to three months for the group to partially price in the forex factor to customers,” said Lee.