LKT Industrial Bhd ... May 2008

Since its inception in 1948 as a foundry manufacturing metal products, LKT has impeccably grown into an integrated group of companies offering a host of engineering solutions for manufacturing needs.

LKT’s integrated manufacturing network provides solutions ranging from collaborative design and development, fabrication of custom tooling and machine steel structure, plastic injection moulding, module and finished product assembly solutions, among others, to the aerospace, semiconductor, electronics and automotive industries.

It also own brands of ergonomic industrial storage systems and precision cutting tools, sold through its distribution channels worldwide.

What’s Up?
It will embark on a business restructuring and consolidation exercise in the next six months as part of its efforts to enhance its global competitiveness before moving on to expand its business into other industries such as aerospace..

Strategic measures and initiatives will be implemented to revive and address existing issues within the group with the objective of propelling it towards global industrial excellence.

Initial stages of business restructuring will see their venturing into the aerospace industry on top of its existing businesses and this will be expanded to include other industries including medical, solar and oil and gas. The group stand to benefit from leveraging on SAM’s (Singapore Aerospace Manufacturing) vast business outreach and capitalising on its extensive customer network.

*** In September 2007, Singapore Precision Engineering (SPE) which is a subsidiary of SAM, made a general offer to acquire all the shares in LKT that it did not own at RM3.50 each. As of the latest announcement, SPE has received acceptance close to 90% of the shares ***

Financial Results …

For the financial year ended December 31, 2007 the group recorded RM178.8 million revenue in 2007 compared to RM274.3 million in 2006, a decline of 30%. The group registered a loss before tax of RM13.3 million in 2007 compared to a pre-tax profit of RM31.7 million in 2006.

The decline in revenue was attributed by the adverse market situation which influenced the operating environment. Softer equipment demand in the semiconductor industry and the additional provision of doubtful debts and inventory, coupled with the weakening US dollar against the ringgit contributed to the unfavourable results.