Inari Profits Up 19.9% To RM108.1 Million as Semiconductor Sector Stays In Vogue

Inari Amerton Berhad Q2 recorded revenue of RM420.3 million for the Q2 FY2022, representing an increase of 11.5% compared to the same quarter in the previous year of RM376.8 million. Growth in revenue was recorded in all business segments with profit after tax of RM108.1 million for the current quarter, an increase of 19.9% from RM90.1 million recorded in the corresponding quarter.

These better profits were mainly attributed to the global shortage in semiconductors which is driving demand for these components. However, in comparison with the immediate preceding quarter th group’s revenue dropped 2.5% to RM420.3 million in the current quarter from RM431.1 million in the immediate preceding quarter. The slight decrease was mainly due to lower loading volume in Opto business segments.

As for-profit derived for the current quarter, this is a slight improvement over RM106.9 million recorded in the immediate preceding quarter. Financial year to date against preceding year corresponding financial period for the six months period ended 31 December 2021, the Group recorded revenue of RM851.4 million, representing a 17.5% increase from RM724.5 million in the preceding year corresponding period. Inari’s profit after tax increased by 34.2% to RM214.9 million for the period ended 31 December 2021 from RM160.2 million in the preceding year corresponding period. The increase was mainly contributed by higher revenue, interest income from fund placement and favourable forex exchange rates.

On the outlook, the International Monetary Fund has in its January 2022 World Economic Outlook Update reported that the global economy enters 2022 in a weaker position than previously anticipated. The new Omicron COVID-19 variant spreads, led to countries having reimposed mobility restrictions, rising energy prices, and supply disruptions have resulted in higher and more broad-based inflation than anticipated. Global growth is expected to moderate from 5.9% in 2021 to 4.4% in 2022 – 0.5% lower for 2022 than in its October 2021 Update.

In World Semiconductor Trade Statistics (WSTS)’s November 2021 market forecasts, the worldwide semiconductor market is expected to increase 25.6% in 2021 and 8.8% in 2022, which corresponds to a market size of USD 601 billion for 2022. The growth is driven by a double-digit growth of the Sensors and Logic products categories, and all other major product categories including Analog, Memory, and Optoelectronics are also expected to show positive
growth rates. International Data Corporation (IDC) in December 2021 revised its forecast for shipment of
smartphones to grow at a lower 3% in 2022 due to “continued component shortages and logistical challenges”. The transition to 5G phones will continue in 2022 albeit at lower average selling prices.

Barring any dangerous resurgence of the covid-19 pandemic beyond Omicron, the Group remains positive on its near-term prospects and believes the momentum for 2022 will continue to be resilient in line with industry forecasts from good demand its products.

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