KUALA LUMPUR: Mestron Holdings Bhd (MHB) saw its net profit for the fourth quarter (Q4) ended 31 December 2021 (FY21) decline by more than 50 per cent to RM1.0 million as compared to RM2.3 million recorded in the same quarter a year ago.

The decline has led its full-year net profit for FY21 to RM3.1 million, which is almost half of the RM6.1 million recorded in FY20.

The decreased profit was due to the loss-making subsidiaries and fluctuation in the price of raw materials such as steel plates and steel pipes, in line with global steel pricing, the company said in a filing with Bursa Malaysia.

Despite the weaker net profit during the financial year, demand for Mestron's products remains robust, as seen by the stronger revenue.

The company's revenue increased by 15.5 per cent to RM21.5 million in Q4 of FY21, bringing total revenue to RM58.4 million for the year.

This is a 3.0 per cent increase over the RM56.6 million in revenue generated in FY20.

Managing director Por Teong Eng said it has been a challenging year for the company as the prolonged Covid-19 pandemic has disrupted the supply chain globally, leading to a fluctuation in raw material prices such as steel.

"Despite the difficult operating environment that is often affected by the movement restrictions, we have taken proactive measures to mitigate the impact on the company's earnings.

"We have managed to sustain the company's profitability and revenue growth momentum despite these challenges.

"It shows the resilience of the company and that demand for our products remain strong," Por said in a statement today.

Going forward, the outlook for the company remains positive as revenue continues to inch higher, led by strong demand for Mestron's specialty poles, mainly for the telecommunication sector.

"The order backlogs are growing as demand for our specialty poles remains robust, especially for the telecommunication sector.

"The rollout of 5G network in Malaysia continues to be a catalyst for the company as this would keep demand for our specialty poles strong," Por said.

Given that the exposure in Malaysia consists of about 93.5 per cent of the company's revenue, this would play a vital role to drive growth going into FY22.

Aside from that, Mestron plans to utilise its healthy financial position through value-accretive efforts and diversification to expand its earnings base and visibility.

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