Notion VTec 3Q earnings slip to RM2.97m, cautious on 4Q

KUALA LUMPUR: Notion VTec Bhd posted net profit of RM2.97m in its third quarter ended June 30, 2010, down sharply from the RM11.1 million a year ago as earnings were impacted by the initial start-up cost of new projects and it is cautious about the fourth quarter

It said on Thursday, Aug 5 revenue for 3Q rose 36% to RM60.8 million from RM44.71 million a year ago but expects the 4Q revenue to be lower due to lower orders from the hard disk drive (HDD) components sector. Earnings per share shrank to 1.92 sen versus 7.88 sen. 'The lower earnings is mainly attributable to initial start up cost of new projects such as R D, depreciation of machinery, materials and labour whereas the earnings will only come on stream in the following quarters,' it said.

Notion VTec said there were quality issues for one of its HDD components which resulted in rectification and compensation cost. The group were also affected by the weaker US dollar and euro for the quarter under review.

'The group recorded pre-tax profit of RM3.9 million as compared to the immediate preceding quarter of RM15.5 million, a decrease of 74.8%,' it said.