Globetronics Faces Semiconductor Industry Challenges Amidst Earnings Dip
Globetronics Technology Bhd, a leading semiconductor company, has expressed concerns over the ongoing macroeconomic and geopolitical challenges that are impacting the semiconductor industry. The company expects uncertain end demand, rising inflation, and manpower shortages to persist, further exacerbating the industry's difficulties.
In response to the prevailing conditions, Globetronics has been proactive in taking measures to minimize potential exposures or disruptions that may arise from these challenges. Despite the headwinds, the company remains committed to navigating the turbulent landscape with resilience and adaptability.
For the second quarter that ended on June 30, 2023, Globetronics reported a decline in net profit to RM7.08 million from RM11.19 million compared to the previous year. The company's revenue also dipped to RM31.51 million from RM47.85 million previously. These results were primarily attributed to lower volume loadings from some of its customers and an increase in tax expenses, amounting to RM1.8 million compared to RM600,000 in the same period last year.
Similarly, for the six-month period ending June 30, 2023, Globetronics witnessed a decline in net profit to RM10.38 million from RM20.64 million in the previous corresponding period. The company's revenue for the same period decreased to RM64.64 million from RM90.68 million.
Both the South-East Asia and North America segments of the company recorded sales decreases compared to the previous corresponding period, indicating the widespread impact of the challenges faced by the semiconductor industry.
Looking ahead, Globetronics foresees a challenging year in 2023, with expectations of a decline in profitability for the financial year. The company cites several factors contributing to this projected decline, including softer revenue forecasts from customers, the full-year tax impact of an expired pioneer status in one of its subsidiaries, and the effect of increased minimum wages and utilities costs.
Despite the anticipated difficulties, Globetronics remains determined to overcome the obstacles and emerge stronger from these challenging times. The company is confident in its ability to adapt to the ever-changing industry dynamics and implement strategies to safeguard its position in the semiconductor market.
As the global semiconductor landscape continues to evolve, Globetronics is committed to leveraging its expertise and innovative capabilities to meet the demands of an increasingly complex market. By staying agile and proactive in facing the challenges ahead, the company aims to solidify its standing as a key player in the semiconductor industry while driving sustainable growth and success.