JCY likely to maintain strong earnings in Q2 [New Straits Time (Malaysia)]
(New Straits Time (Malaysia) Via Acquire Media NewsEdge) KUALA LUMPUR: JCY International Bhd's second-quarter earnings could be as strong as its first-quarter figures.
Southeast Asia's largest technology company is expected to release its second-quarter earnings by the middle of next month.
"Our production output should be on target," said JCY finance director, James Wong, in an interview with Business Times recently.
He added that the company has been doing well in the current quarter (second quarter), subject to external factors such as fluctuations in the currency markets.
In the first quarter ended December 31 2011, JCY's net profit surged more than twentyfold to RM162 million from RM7 million in the same period a year ago.
The huge surge was attributed to the flash floods in Thailand which had caused havoc to hard disk-drive (HDD) component manufacturers based in the kingdom.
The situation had benefited JCY which operations were spared by the October floods, thus allowing the company to take up additional orders from HDD makers, such as Western Digital Corp and Seagate Technology.
"We are doing well, not just because of the floods in Thailand, but also due to a strong product mix that helps us leverage on the pricing," said the Sarawakian, who is now based in Singapore.
Wong said Western Digital, one of the largest computer HDD manufacturers in the world, has been a long-term client of JCY. The Thai floods, meanwhile, has helped open up doors for JCY at Seagate, the world's top manufacturer of HDD and storage solutions.
"I would say that the business opportunities at Seagate for JCY currently are only at the tip of the iceberg," said Wong.
As at the end of last year, JCY had about RM68.74 million cash. The company had paid shareholders RM40 million in dividends in the first quater.
In the coming quarter, Wong said the company is hoping to declare more dividends and expects to be able to stick to a dividend of two sen (RM40 million).
JCY is about 75 per cent controlled by YKY Investments Ltd, while the rest of the company is owned by the public. Among its minority shareholders are Commerce Technology Ventures Sdn Bhd, Goldman Sachs and Morgan Stanley.
The company currently controls between 25 and 30 per cent of the mechanical component market for global HDDs. "We are one of the world's largest precision engineering manufacturers of HDD components, which makes us a strategic global company, with intrinsic values," said Wong.
The company has earmarked as much as RM300 million over the next two years for its business expansion. It employs over 18,000 people, of which 15,000 are based in Malaysia.
JCY has 18 factories located mainly in Malaysia, China (Suzhou and Foshan) and Thailand.
Meanwhile, Wong did not discount the possibility of buying rival companies if the opportunity arrives, but noted that JCY's long- term plan is to work on ways to reduce costs.
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