Dufu remains bullish on HDD revenue stream

PETALING JAYA: Dufu Technology Corp Bhd expects its hard-disk drives (HDD) revenue stream to remain positive, with cloud demand leading the charge to fuel the group’s growth.

It said it is also positive on its non-HDD segment, as the semiconductor and technology hardware capital spending remains strong from domestic equipment exporters.

“All-in-all, we are seeing revenue growth for the year 2022, which should contribute positively towards the group’s earnings,” it said in a filing with Bursa Malaysia yesterday.

Dufu, which specialises in manufacturing precision machining parts and components, reported a net profit of RM29.26mil for its second quarter ended June 30, 2022, compared with RM15.92mil a year earlier.

The gruop said this was mainly due to higher foreign exchange gain of RM6.2mil recorded in the current quarter, compared to a foreign exchange loss of RM200,000 in the previous year corresponding quarter.

“On top of this, favourable product mix also contributed to the profitability reported in the current quarter,” it said.

Revenue in the second quarter grew to RM91.79mil from RM88.22mil a year earlier. Basic earnings per share stood at 5.50 sen, compared with 3.10 sen previously.

“The increase in revenue was mainly due to the higher revenue related to HDD components.

“On top of this, the group also registered growth in the sheet metal fabrication business segment.”

For the six-month period ended June 30, 2022, Dufu’s net profit improved to RM47.58mil from RM35.44mil in the previous corresponding period, while revenue rose to RM178.11mil from RM167.72mil previously.

Dufu also declared an interim single-tier dividend of 2.5 sen per share, to be paid on Sept 23.

As the economy recovers from the pandemic, Dufu said it is facing acute shortage of workers and other cost-related challenges, such as the rising costs of raw materials and freight costs.

“The current Russia-Ukraine conflict and the forcing of lockdowns on virus hotspots in China may lead to possible supply chain disruptions, operational stoppages and shortage of raw materials supply.

“The group is mindful of the threat of Covid-19-related virus and will continue to adhere to the existing standard operating procedures to safeguard the health and safety of its employees.”

Additionally, Dufu said it will continue to streamline its business structure, improve on its processes and optimise its operations.

“Based on mixed developments for the group, coupled with the associated risks of the unpredictability and uncertainty posed by the various challenges on the company’s business operations, fluctuation in raw materials prices and supply chain disruption, we are cautiously optimistic about our financial performance in the coming third quarter of 2022,” it said.

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