JCY expects profitable year, targets higher payout

PETALING JAYA: JCY International Bhd expects to remain profitable moving into the second half of the year, helped by better demand for hard disk drive (HDD) mechanical components and the exit of marginal players in the industry.
JCY returned to the black in the second quarter ended March 31, 2014, registering a net profit of RM38.1 million compared with a net loss of RM20.78 million a year ago.
Its six-month net profit stood at RM68.36 million versus a net loss of RM46.51 million in the corresponding period.
Last financial year, JCY suffered a net loss of RM61.6 million, hit by lower orders and reduction in average selling price.
"Looking at what's happening (now), we're quite positive (to be profitable)," its executive director Datuk James Wong told a media briefing here yesterday.
"Now only the big boys are left and we're one of them, and we are in a strong financial position," he said.
Wong is also not overtly concerned about possible disruptions to its operation in Thailand despite the country's political turmoil.
"Thailand is only a part of our operation, the bulk of it is still in Malaysia," said Wong, adding that the company is applying to the Malaysian government for continued tax exemptions, something it has been enjoying thus far.
In keeping with its expectations, JCY targets to increase its dividend payout this year, as it spends less on infrastructure development, and more on automation.
"Our capital expenditure will not be very high, and looking at the current cash position, why not give back more (dividends) to the shareholders," he said, without elaborating. JCY declared a 2.25 sen dividend for the six-months of the current financial year, inclusive of a 1.25 sen second interim dividend which was announced two days ago.
JCY mainly supplies HDD mechanical components to Western Digital and Seagate, which are among the largest players in the HDD market globally.
The company has a market share of around 20% to 25% for the supply of mechanical components in the global market.
JCY has six manufacturing facilities in total, three of which are located locally in Johor, Malacca and Penang, while the other three are in Thailand and China.