KUALA LUMPUR (Feb 27): Kitchen sinking exercise seems to continue at D&O Green Technologies Bhd (KL:D&O) for the second consecutive quarter, writing off RM297.8 million inventory values. 

The company booked an inventory impairment of RM47.2 million in the fourth quarter ended Dec 31, 2025 (4QFY2025) after a RM250.46 million charge three months earlier.

Consequently, D&O posted its second-largest quarterly loss of RM60.11 million in 4QFY2025, after it reported its highest-ever quarterly loss of RM169 million in the preceding quarter. 

The automotive light-emitting diode maker said the latest impairment stemmed mainly from a reassessment of standard unit costs — covering materials, direct labour and manufacturing overheads — to better reflect actual operating conditions.

Quarterly revenue fell 5.3% to RM248.11 million from RM261.89 million, with the decline attributed primarily to foreign exchange translation movements, a bourse filing showed on Friday. Shipment volumes remained stable, but translated revenue was lower, it said.

Gross profit shed 24.6% to RM39.45 million, with gross margin narrowing to 15.9% from 20.0% a year earlier, due to lower production utilisation rates.

For the full financial year ended Dec 31, 2025 (FY2025), D&O sank into a net loss of RM228.15 million, or 18.41 sen per share, in contrast to a net profit of RM39.5 million the prior year, while annual revenue declined 8% to RM989.7 million from RM1.08 billion.

Looking ahead, D&O said it enters the new financial year with improved cost visibility following a comprehensive review of inventory impairment policy and costing methodologies.

It has also rolled out margin enhancement measures and adopted digitalisation initiatives to strengthen yield monitoring, enhance production data accuracy, and support operational efficiency.

“These initiatives are expected to progressively strengthen cost resilience and support margin recovery as production volumes normalise,” said D&O.

It expects sales performance in 2026 to remain broadly stable, supported by encouraging design-in activity and secured design wins.

Shares in D&O fell 2.5 sen or 5.1% to close at 47 sen on Friday, valuing the group at RM582.56 million. Over the past year, the stock has fallen 66.4%.

Read also:
D&O records largest quarterly loss as it realigns product portfolio