PIE expects better FY23 performance on high demand for EMS

GEORGE TOWN: PIE Industrial Bhd expects its turnover for the financial year 2023 (FY23) to surpass the previous year’s performance.

Group managing director Alvin Mui said the electronic manufacturing services (EMS) sector would contribute significantly to the group’s revenue.

“Most EMS customers increased their orders in the third quarter to boost the group’s performance for the nine months of FY23,” Mui told StarBiz.

Mui added that the revenue would surpass the RM1.16bil registered for its financial year 2022 (FY22).

The group’s net profit for FY23 is expected to be about the same as FY22’s RM71mil.

For the nine months of FY23, the group posted RM45.5mil in net profit on the back of a RM919.76mil turnover, compared with RM43.3mil and RM823.86mil achieved in the previous year’s corresponding period.

“The spending for renovation and expansion works will eat into this financial year’s profit margin,” he said.

According to Mui, the group remains optimistic about engaging potential new customers from diverse medical, industrial, consumer and telecommunication industries.

“Good ongoing discussion for new projects is in progress, which could positively contribute to the group’s continuous growth if successfully engaged,” he added.

“These new projects include printed-circuit-board assembly products for drones and box-built medical and smart-home devices.

Mui said the group had allocated around RM40mil to complete the renovation and expansion works for its fifth and sixth plants to accommodate new business opportunities.

“We have recently completed the necessary renovation work for the fifth plant, while the sixth plant will be ready in the third quarter of 2024.

“Both expanded facilities will support PIE’s growth for the next five years,” he said.

According to Mui, the group has started installing solar panels in six plants for green electric energy generation, which will be completed by year-end.

“Meanwhile, the group also implemented various automation and process optimisation to improve product yield, consistency and quality while utilising few direct labourers.”

Mui said this has resulted in good overall profit margin improvement.

“Revenue derived from raw wire and cable manufacturing, a 15% revenue contributor, is also affected by the current slowdown.

“We expect business to pick up again in the fourth quarter of this year,” Mui said.

He added that although copper prices had dropped since the third quarter of 2023, the raw wire and cable manufacturing division could maintain its profit margin as the selling price quoted to customers was pegged to the price set by the market.

“The revenue from the cable assembly and wire harness of our subsidiary in Thailand is expected to increase, as new business opportunities are now available in Thailand.”

Mui noted that many new manufacturing companies are setting up operations in Thailand.