"The board is of the view for FY15 it will remain weak and only in FY16 will it return to profitability," the precision parts manufacturer said in a filing with Bursa Malaysia yesterday.
The group noted that the hard disk drive (HDD) segment is still unpredictable as orders remain volatile.
"The focus is on improving production processes in machining to minimise cycle time and improve yields.
"The single lens reflex interchangeable segment is now at a steadier level with not much growth due to the maturity of the market and awaiting new product rollouts. It is comforting that our strategic partner continues to support us in volume," it added.
As for the automotive/industrial segment, Notion VTec said it is more robust in orders but subdued by the weak euro.
"The group's exposure to foreign exchange (forex) instruments will be minimised with the expiry of many such contracts entered into two years ago and in the month of May 2015 is when the expiry occurs most. After which, the favourable US dollar exchange rate will reflect better margins on products that are priced in US dollar," it added.
Notion VTec saw its net loss narrowed to RM4.54 million or 1.69 sen a share for the second financial quarter ended March 31, 2015 (2QFY15) from RM7.38 million or 2.75 sen a share a year ago, mainly due to provision for mark to market position on its US dollar foreign currency hedging contracts amounting to RM12.6 million.
This was despite a 44.7% increase in revenue for 2QFY15 to RM63.94 million from RM44.2 million in 2QFY14 due to better average selling price from the stronger US dollar against the ringgit.
For the six months period (6MFY15), the precision parts manufacturer's net loss was reduced by about half to RM9.8 million or 3.65 sen a share from RM17.38 million or 6.48 sen a share a year ago.
Revenue increased 33% to RM122.19 million from RM91.91 million in 6MFY14.
Notion VTec (fundamental:1.15; valuation:0.9) shares closed unchanged at 39 sen yesterday, giving it a market capitalisation of RM104.62 million.
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