BSL ... Mar 09

Precision metal part maker BSL Corporation Bhd sees it "highly unlikely" that it can maintain the 30% revenue growth rate it achieved in the last financial year ended Aug 31, 2008 (FY08) amid the current global financial crisis that has severely affected its electrical and electronic (E&E) division.

The company's main concerns now were in managing its balance sheet and in cutting operation costs. It has also put its overseas expansion plans on hold.

BSL has a factory in China, making seamless pipes for boilers, automotives and bearings. In Malaysia, it has four factories in Klang and Batu Caves.

The group's major customers include JVC Electronics (M) Sdn Bhd, Matsushita Electric Co (M) Bhd, Panasonic HA Air-Conditioning (M) Sdn Bhd, Samsung Electronics (M) Sdn Bhd, Hitachi Electronic Product (M) Sdn Bhd, Sony EMCS Malaysia Sdn Bhd and Canon Opto (M) Sdn Bhd.

Given the economic impact on its E&E division, it is now looking for more businesses for its agricultural division. They are developing more sales from non-traditional (non E&E) customers, such as (those in the) agricultural (sector).

The company's agricultural division was involved in building feed troughs for high-end chicken farming. The company began the business in the provision of such a technology, starting with a German company based in Malaysia two to three years ago.

It expects this division to continue to be strong, as food is a resilient Industry - and this technology is getting popular in Malaysia, as it is a self-contained technology. They are looking at opportunities to provide such a technology to other customers as well.

They are looking for further new projects and it is good to grow this business. The agriculture industry is a growth driver, but it is not necessary that it be the group's main contributor.

They hope to grow the business to teen-percentage by FY09 (in contribution to group revenue.

Financial Results

For FY08, its revenue surged 33.45% to RM139.65 million from RM104.65 million in the previous year, while net profit grew 12.54% to RM4.83 million from RM4.29 million.

Basic earnings per share rose to five sen from four sen. It declared a dividend of 1.33 sen for the year, representing a yield of 4.4% at 30 sen per share.

For FY08, the E&E and industrial divisions contributed 76% to the group's revenue, while the automotive and agriculture divisions accounted for 19% and 5% respectively.

The company hoped to pay 30% to 40% of its net profit as dividends to shareholders in the future.

For its first quarter ended Nov 30, 2008 (1QFY09), it posted a 85.6% drop in net profit to RM237,000 from RM1.65 million a year earlier, due to a lower margin from its printed circuit board (PCB) assembly, precision stamping as well as fabrication and forging division.

Revenue rose 9.86% to RM36.17 million from RM32.93 million a year earlier. It did not declare any dividend.