Astino expects product demand to stay moderate after posting 72.7% y-o-y decline in 2Q net profit

KUALA LUMPUR (March 24): Astino Bhd, which saw its latest net profit plummet 72.73% year-on-year (y-o-y), warned that demand for its products will remain moderate as it expects to be hit by multiple headwinds.

The group posted a net profit of RM2.95 million in the second quarter ended Jan 31, 2023 (2QFY2023) — the lowest since the first quarter of FY2019 when it posted a quarterly net profit of RM3.22 million — down from RM10.83 million, dragged by lower profit margin due to the higher cost of materials. The weak market demand for its products also required it to sell products at competitive pricing, resulting in the group posting lower profitability in the quarter under review, the Ipoh-based flat steel products maker said in a bourse filing. Quarterly revenue also fell 11.52% y-o-y to RM143.29 million, from RM161.95 million.

Moving forward, it expects headwinds to persist, including escalating input costs, volatile material costs, and the weakening of the ringgit against the US dollar. The weaker quarterly performance dragged its net profit for the first half of FY2023 (1HFY2023) to RM10.27 million, from RM28.41 million in 1HFY2022, as higher costs of materials saw cost of production weigh on earnings. Half-year revenue, however, rose to RM311.45 million, from RM298.42 million, bolstered by an increase in overseas market demand. Shares in Astino closed down 0.5 sen or 1% to 49.5 sen, bringing the group a market capitalisation of RM244 million.