KUCHING: Pansar Bhd foresees renewed shipbuilding activity to benefit the company.
“Renewed shipbuilding activity is expected to have a positive impact on our company,” said Pansar, which is a supplier of marine engines for ship construction.
The company said the state government’s thrust of infrastructure development would give an impetus to the economy.
Releasing its third quarter to Dec 31, 2018 (3Q-2018) financial results, Pansar said group’s earnings had been affected by higher operating expenses and lower gross profit.
In the quarter under review, group’s net profit fell to RM898,000 from about RM2.36 million in the preceding year corresponding period as revenue dropped to RM88.6 million from RM93.1 million. Earnings per share slipped to 0.29sen from 0.84sen during the same period.
Over a nine-month period to Dec 31, 2018, Pansar recorded lower group’s net profit of RM4.53 million, down from RM6.91 million a year ago, despite slight improvement in group revenue to RM283.2 million from RM280.5 million.
“Other than the revenue contribution from the new heavy equipment business, both building products and electrical & office automation divisions also recorded higher revenues.
“The increase was, however, partially offset by the lacklustre sales performance from marine & industrial, agro engineering and mechanical & electrical divisions,” Pansar said when reviewing the group’s performance in notes to its latest financials.
As part of the strategy to increase its share of the construction and palm oil industries, Pansar has recently secured a new distributorship for the sales and distribution of construction equipment which include backhoe loaders, heavy excavators, compact excavators, telehandlers and the associated spare parts.
In 3Q-2018, the new heavy equipment segment contributed pre-tax profit of RM600,000 on the back of RM4.1 million in revenue.
During the nine-month period under review, the building products segment saw its revenue rose by 11.2 percent to RM113.4 million from a year ago, driven by higher sales volume largely from roofing products and building structural products.
But the segment’s pre-tax profit fell to RM7.2 million from RM7.9 million due to profit margin compression, coupled with higher operating expenses, arising largely from higher finance costs and doubtful debt provision.
The electrical & office automation segment registered a remarkable increase in revenue to RM19.9 million or up by 43.8 percent. This was attributed to higher sales largely from consumer electronic products, lighting and air conditioning products.
However, the segment recorded a 26.6 percent decline in pre-tax profit to RM1 million due mainly by margin compression resulting from a competitive operating environment.
For the nine-month period under review, the marine & industrial segment saw a 27.3 percent drop in revenue to RM56.3 million from RM77.5 million a year ago while pre-tax profit slumped to RM8.6 million from RM11.1 million or down by 21.8 percent.
“The lower performance was primarily due to higher doubtful debt provision and weaker sales largely from marine engines,” explained Pansar.
The mechanical & electrical segment achieved higher pre-tax profit to RM4 million from RM3.7 million despite a decline in turnover of 4.7 percent to RM55.4 million over the same nine-month period.
The agro engineering segment posted a 17.3 percent drop in revenue to RM24 million and 23.9 percent decline in pre-tax profit to RM2.1 million during the same period of comparison.
Updating the status on the utilisation of the proceeds from the company’s private placement early last year, Pansar said only RM956,000 out of about RM5.58 million earmarked for potential expansion and capital expenditure had been used up as of Feb 11, 2019.
The entire sum of about RM6.28 million set aside for the group’s working capital for business operation had been spent.
Pansar group’s short-term borrowings stood at RM22.8 million as of Dec 31, 2018.
On prospects going forward, Pansar noted that while global trade tensions persist, the ringgit, crude oil and palm oil prices, have, however, stabilised.
