Globetronics Technology BHD: Navigating a Challenging Quarter Amidst Strategic Shifts
Greetings, fellow investors! Today, we’re diving into the latest interim report for Globetronics Technology BHD (GTB) for the financial quarter ended 31 March 2025. This report offers a glimpse into the company’s performance, strategic moves, and the broader landscape it operates within. While GTB’s revenue saw a modest uptick, the quarter presented significant challenges, primarily impacting its profitability. Let’s unpack the key takeaways and understand what this means for the semiconductor and electronics industry player.
Core Data Highlights: A Closer Look at Q1 2025
Before we delve into the numbers, it’s important to note a key change: Globetronics has adjusted its financial year-end. As a result, the report explicitly states that no comparative financial information for the corresponding quarter or period last year is presented. Therefore, our quarterly comparison will be against the immediate preceding quarter ended 31 December 2024 to provide context on recent trends.
Overall Performance at a Glance (Q1 2025 vs. Immediate Preceding Q4 2024)
Current Quarter Ended 31 March 2025
Revenue: RM25,027k
Operating Profit: RM(381)k (Loss)
Profit Before Tax: RM363k
Net Profit: RM130k
Basic Earnings Per Share: 0.02 sen
Immediate Preceding Quarter Ended 31 December 2024
Revenue: RM23,639k
Operating Profit: RM5,735k
Profit Before Tax: RM6,414k
Net Profit: RM6,009k
Basic Earnings Per Share: ~0.89 sen (Calculated based on net profit and shares outstanding)
While revenue saw a modest 6% increase, the significant drop in profitability is stark. The report attributes this sharp decline in profit before tax and net profit primarily to a foreign exchange loss of RM0.48 million recognized in the current quarter. This contrasts sharply with the RM6.2 million forex gain recorded in the immediate preceding quarter. This swing had a substantial impact on the bottom line, overshadowing the positive effect of higher volume loadings from certain customers.
Balance Sheet Snapshot (As at 31 March 2025 vs. 31 December 2023)
Let’s briefly look at the company’s financial health:
| Item | As at 31 March 2025 (RM’000) | As at 31 December 2023 (RM’000) |
|---|---|---|
| Total Assets | 336,702 | 336,043 |
| Total Equity | 308,393 | 308,133 |
| Cash and Cash Equivalents | 127,159 | 210,110 |
| Other Receivables, Deposits & Prepayments | 71,997 | 1,042 |
While total assets and equity remained relatively stable, there was a noticeable decrease in cash and cash equivalents. This is partly offset by a substantial increase in “Other Receivables, Deposits & Prepayments,” which could be related to business activities or advances.
Cash Flow Insights (15 Months Ended 31 March 2025)
The cash flow statement for the 15-month period reveals that the Group experienced net cash outflows across all major activities:
- Net cash used in operating activities: RM55.19 million
- Net cash used in investing activities: RM16.77 million (including RM22.77 million in property, plant, and equipment acquisitions)
- Net cash used in financing activity: RM10.42 million (primarily due to dividends paid, partially offset by share issuance)
This collectively led to a net decrease of RM82.38 million in cash and cash equivalents during the period, explaining the lower cash balance on the balance sheet.
Geographical Performance (15 Months Ended 31 March 2025)
Globetronics’ manufacturing activities are based in Malaysia, with sales and distribution primarily in South East Asia and North America. For the 15-month period:
| Region | Revenue (RM’000) | Segment Profit/(Loss) Before Tax (RM’000) |
|---|---|---|
| South East Asia | 126,586 | 18,590 |
| North America | 7,572 | (5,395) |
| Others | 1,467 | (1,041) |
South East Asia remains the dominant and profitable segment, while North America and “Others” recorded losses, indicating areas that might require strategic adjustments or are still in early growth phases.
Risk and Prospect Analysis: Navigating Headwinds and Seizing Opportunities
The semiconductor industry continues to face a complex mix of macroeconomic and geopolitical challenges, leading to unpredictable market conditions. Globetronics acknowledges these headwinds and emphasizes its ongoing efforts to minimize potential exposures and disruptions. This proactive stance is crucial in such a volatile environment.
On a positive note, the Group has forged a significant partnership. On 21 November 2024, GTB entered into a Services Agreement with ChipMOS Technologies Inc., a global leader listed in Taiwan and Nasdaq. Under this agreement, Globetronics will provide advanced dicing, packaging, and testing services for ChipMOS’ integrated circuit products. This collaboration is a strategic move, expected to enhance both companies’ capabilities in semiconductor backend services and meet the growing global market demands. It signifies GTB’s commitment to securing new business and diversifying its customer base.
Looking ahead, the company remains cautiously optimistic. Barring unforeseen circumstances, Globetronics expects to achieve satisfactory financial performance in 2025, leveraging its new partnerships and ongoing measures to mitigate market risks.
