AJIYA (7609) - Ajiya's 2Q net profit dives 84% on weaker demand

Ajiya's 2Q net profit dives 84% on weaker demand
By Supriya Surendran & Ahmad Naqib Idris / theedgemarkets.com | July 22, 2016 : 7:35 PM MYT

KUALA LUMPUR (July 22): Metal roofing and safety glass specialist Ajiya Bhd saw its net profit for the second quarter ended May 31, 2016 (2QFY16) dive 84.1% to RM973,000 from RM6.13 million a year ago, on weaker market conditions, primarily in the construction sector, which affected demand for its products.

Its profit before tax for the quarter more than halved to RM7.92 million from RM16.99 million in 2QFY15, Ajiya's bourse filing today showed.

Revenue-wise, the Segamat-based company reported a 9.4% decrease to RM101.15 million, from RM111.67 million.

As for its cumulative six months ended May 31, 2016 (1HFY16), net profit came in at RM4.07 million, down 62.2%, from its 1HFY15 net profit of RM10.76 million.

Its half-year revenue also fell 10% lower to RM194.79 million, from RM216.54 million in 1HFY15.

On prospects, the company expects its Ajiya Green Integrated Building System (AGIBS) to play a vital role in its growth trajectory, and will continue to expand its market in Malaysia, Thailand and other Southeast Asian countries.

Separately, in a statement, Ajiya managing director, Datuk Chan Wah Kiang said the group remains optimistic on the group’s performance, in line with the growing demand, especially for affordable homes.

“We have transformed our metal products operations by becoming a manufacturer for a comprehensive range of housing building components, as seen in the Ajiya Green Integrated Building Systems (AGIBS).

“The AGIBS housing system is expected to play a vital role in our group’s trajectory, in view of the government’s effort to build affordable housing projects in the coming years and to elevate the performance of the Malaysian construction industry,” he said.

He added that Ajiya is also expanding its production capacity, as the group vies for more public sector-led projects.

Meanwhile, Ajiya shared it had obtained its shareholders nod to carry out its proposed share split, bonus issue and the establishment of an employees’ share option scheme (ESOS), following its extraordinary general meeting (EGM) today.

The proposed share split entails the subdivision of every one RM1 share in Ajiya into four shares of 25 sen each, while the bonus issue comprises the issuance of 152.29 million warrants in Ajiya, on the basis of one warrant for every two subdivided shares.

The proposed share split is expected to be completed by the third quarter of 2016.

Ajiya shares closed down 2 sen or 0.48% today to RM4.13, for a market capitalisation of RM314.48 million. In the past 12 months, its shares have risen 71.4%, from RM2.41.

AJIYA (7609) - Ajiya's 2Q net profit dives 84% on weaker demand