Acoustech aims for profitable FY15

PORT KLANG: Acoustech Bhd aims to return to the black for the financial year ending Dec 31, 2015 (FY15), from a net loss of RM2 million in FY14, said its director Leong Ngai Seng.
"This year, we're striving to be profitable. We will not hit tens of millions but we hope to hit RM2 million to RM3 million (net profit).
"Our focus is to improve our margins to get back to profitability. We're trying to reduce our direct and indirect costs, which will contribute to improved margins," he told reporters after the group's EGM here yesterday.
Leong said the group started its business rationalisation plan early last year where it re-looked its manufacturing assets and eliminated excess capacity.
Earlier at the EGM, Acoustech's shareholders approved the proposed disposal of its factory and a residential property in Sungai Petani, Kedah for RM15 million and RM550,000 respectively.
"Our disposal in Sungai Petani was case in point where we felt there was no need to maintain two locations for our business because our main factory is in Port Klang. With this, we can rationalise our manufacturing lines in one location, and indirectly that would help us save costs," explained Leong.
Acoustech's main business is in the manufacturing of speaker units on an original equipment manufacturing basis for major consumer electronic brand names. Almost all of its products are directly or indirectly exported to Europe, America and North America.
"The manufacturing industry is challenging and sad to say we've not been able to generate the profitability that we had in earlier years," said Leong, adding that this was due to increased costs and the competitive landscape that resulted in decreased margins.
The group is also contemplating investing the proceeds from the proposed disposals into industrial property development related businesses as a means of expanding income stream of the group. However, manufacturing will still remain as its core business.
It recently acquired Teras Eco Sdn Bhd, the developer and vendor for the Senibong 88 project in Johor Baru, which carries an estimated gross development value of RM100 million at an estimated total development cost of RM75 million.
At present the project is 55% complete with the targeted completion and delivery date of the project slated for early 2017.
"It (contribution from property) won't be huge because we're not going to be a property player as such. That's not our forte. It's just to mitigate any downturn that we may experience on the manufacturing side."
He added that the group is open to further merger and acquisitions that would help improve the property development business but noted that it is not actively seeking for one at the moment.
"Property is not our main business. We've been looking around. Not just industrial property, but we're looking at different assets and different businesses that could fit into what we do, preferably related to manufacturing," said Leong.
Acoustech's cash reserves stood at some RM50 million.