Thursday, May 19, 2011

JCY declines after 2Q net profit slump

KUALA LUMPUR: JCY International Bhd shares declined in early trade on Thursday, May 19 after its net profit for the second quarter ended March 31, 2011 slumped 81% to RM12.46 million from RM65.88 million a year ago.

At 9.30am, JCY was down 1.5 sen to 63.5 sen with 614,100 shares traded.

The decline in earnings were due mainly to increase in the cost of production resulting from increase in the cost of raw materials like aluminium and stainless steel and also increase in labour cost.

JCY's revenue for the quarter fell 27.7% to RM397.43 million from RM549.69 million. Earnings per share were 0.61 sen while net assets per share was 43.08 sen.

For the six months ended March 31, JCY's net profit tumbled to RM19.97 million from RM143.36 million, while revenue fell to RM836.34 million from RM1.08 billion in 2010.

OSK Research maintained its sell recommendation on JCY and slashed its fair value to 41 sen from 58.5sen.

The research house said JCY's 1HFY11 earnings of RM20 million were way below market consensus and its forecast, comprising only 15.3% and 15.1% of the estimates respectively.

'Taking an increasingly conservative stance as a result of the dismal showing, we cut our FY11 topline estimate by 9.1% and correspondingly our FY11 EPS sinks by 29.4%.

'We think flattish industry growth, unfavorable forex and escalating raw material prices will continue to exert downward pressure on earnings,' it said on May 19.


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