Cape EMS revenue up in second quarter of 2024

KUALA LUMPUR: Amid the present high market scrutiny on Cape EMS Bhd, the Johor-based company reported a lower net profit for its second quarter ended June 30 which fell by 42.6% year-on-year (y-o-y) to RM8.7mil.

But its revenues for the quarter were higher by 36.8% y-o-y to RM166.57mil.

Cape EMS share price has fallen by some 70% since its initial public offering (IPO) opening in March 2023.

The company went public at an IPO reference price of 90 sen and its shares yesterday closed at 42.5 sen a piece.

The electronics manufacturing services (EMS) company is now under intense market attention amid a confidence crisis on its finances.

Its quarterly results report yesterday was also accompanied by a press statement.

It explained its revenue growth was from the increasing demand for its services and was also driven by stronger contributions from both industrial and consumer electronic products under the EMS segment.

These included wireless communication equipments, electronic cigarettes, light electrical vehicles and its newly acquired subsidiary, iConn Inc, it said.

“Despite the revenue achievement, the group faced several interim cost challenges during the quarter. These included increased freight expenses mainly due to port congestion, mobilisation costs for its battery pack manufacturing line, installation costs for an energy saving cooling system and provisions in line with prudent accounting practices.

“The group’s revenue, predominantly denominated in US dollar, was also adversely affected by the strengthening of the ringgit against the dollar,” Cape EMS said.

These had caused the y-o-y drag to its bottomline, the company said.

Currently, Cape EMS operates three surface mount technology lines in-house, but due to high demand and limited capacity, the company said it has strategically outsourced some production to local manufacturers.

“Despite navigating a challenging global landscape characterised by factors beyond our control – including the ongoing US-China trade tensions, global geopolitical conflicts, the Red Sea shipping crisis and the weakening US dollar – we remain vigilant and prudent in managing our operations,” its managing director and group chief executive officer Christina Tee Kim Chin said in a statement.

“While benefiting from robust demand in the industrial electronic products market, we are focused on boosting our efficiency, competitiveness, and ability to quickly adapt to unexpected market shifts,” she added.