The company is also reducing its exposure to US dollar-denominated sales to 70% from about 90%, a move deemed pivotal to safeguard the exporter’s top line.
Notion’s internal financial guidance for FY11 had taken into account the company’s decision to channel more resources to its camera component manufacturing business due to a weaker HDD market.
The capacity in its HDD parts production facilities would be filled by its camera division operations.
The reduction in US dollar exposure for the company’s sales will be made up by its ringgit-denominated transactions in aluminium ingots, and baht-denominated businesses from its unit in Thailand.
A stronger ringgit against a weakening dollar does not bode well for an exporter like Notion because its dollar-based revenue will be less when converted into ringgit.
Notion’s internal financial guidance for FY11 had taken into account the company’s decision to channel more resources to its camera component manufacturing business due to a weaker HDD market.
The capacity in its HDD parts production facilities would be filled by its camera division operations.
The reduction in US dollar exposure for the company’s sales will be made up by its ringgit-denominated transactions in aluminium ingots, and baht-denominated businesses from its unit in Thailand.
A stronger ringgit against a weakening dollar does not bode well for an exporter like Notion because its dollar-based revenue will be less when converted into ringgit.
Against the backdrop of a weaker HDD market, Notion had earmarked a capital expenditure of RM40 million for FY11, a 64%-reduction from the RM111 million for FY10. The bulk of the RM40 million would be channelled to its Thailand operations, while about RM5 million would go to the aluminium plant.
Its net profit in the first quarter of FY Sept 2011 fell 7% to RM13.4 million, or 8.79 sen a share from RM14.41 million or 10.25 sen a share a year earlier.
Revenue, however, rose 6% to RM59.98 million from RM56.33 million. Net profit had fallen due to higher cost of sales besides operating and finance expenses.
In quarterly terms, first quarter net profit climbed 66% from the preceding fourth quarter while revenue gained 13%.
The company’s FY10 net profit rose 6% to RM38 million from RM35.9 million a year earlier while revenue climbed 31% to RM225.4 million from RM172.7million.
The HDD and camera component divisions made up 44% each of its revenue for FY10. The automotive and industrial component manufacturing business accounted for the remaining 12%.
The HDD and camera segments are expected to contribute 50% and 40% respectively to Notion’s revenue for FY11 while the industrial and automotive unit is anticipated to account for the remaining 10%.
Notion sees companies like Dufu Technology Corp Bhd, Eng Teknologi Bhd and JCY International Bhd as its rivals.
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