Malaysia-listed investment holding company Techfast Holdings Bhd on Tuesday (1 June) has posted a 40.7% dive in net profit for 2020 due to its main products of fasteners and precision turned parts experiencing lower demand.
It recorded net profit of RM 2,077,000 (US $665,437) in 2020, down from RM 3,505,000 in 2019, according to its latest financial statement.
Revenue from operations in 2020 was RM 33,147,000, down 11% from RM 29,529,000 in 2019.
The company’s cash and cash equivalents had more than doubled (103%) to RM17,728,000 in 2020, from RM 8,729,000 in 2019.
“Due to advancements in the assembly process of computers and televisions, the main products of fasteners and precision turned parts are experiencing lower demand,” said Datuk Nur Jazlan Bin Mohamed, Independent Non-Executive Chairman.
“Orders received are usually in smaller quantities, which had resulted in lower production efficiency and a business that is no longer scalable, as evident by the decreasing profits recorded,” he added.
“In this regard, in order to reduce the cost of maintaining the operations of low profit businesses, the Company had disposed of its 100% equity interest in Oriem Technology Sdn Bhd (Oriem) which was completed on 7 April 2021.”
Datuk Nur Jazlan, who was appointed as Non-Executive Chairman on 12 November 2020, had additional comments about Techfast’s latest oil bunkering and petroleum trading subsidiary Fast Energy Sdn Bhd (FESB).
“After my appointment as Independent Non-Executive Chairman, the group started its diversification into the energy industry. On 2 November 2020, a new wholly-owned subsidiary company, FESB was incorporated and had since secured several contracts for the supply of petroleum products,” he said.
“It will continue to explore suitable ventures with fleet operators and players in the shipping and logistics industry to secure medium to longer term contracts.”
On 24 March 2021, Techfast completed the acquisition of 35% equity interest in CCK Petroleum Sdn Bhd (CCKSB), whose business is trading of marine fuels.
CCKSB has an asset-light business model, established business network of customers and it holds licenses that enable it to provide oil bunkering services at Johor Port, Penang Port and Port Klang.
To date, Techfast had completed two private placements of new shares in the Company. The Company also announced the details of an Employee Share Option Scheme and another corporate exercise to raise more funds which will mainly be directed towards the oil bunkering and petroleum trading business.
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Related: Malaysia: Techfast starts oil trading unit, unveils bunker supplier ambition with proposed CCK Petroleum acquisition
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Photo credit: Techfast Holdings Bhd
Published: 1 June, 2021
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