2021 has been a watershed year for ViTrox Corporation Berhad (KLSE: VITROX) (“Vitrox”) as the group realised bright earnings prospects on the back on the semiconductor boom which saw heighten demand for its solutions.
Vitrox has just reported its latest financial results for the second quarter ended 30 June 2021 (Q2FY21). We will now catch up with the group by checking on its recent business performance and major corporate developments.
1. Highest quarterly revenue since its inception
For the current financial quarter ended 30 June 2021, the group recorded its highest revenue since its inception at RM196.2 million as compared to RM96.5 million in the corresponding quarter of the preceding year. This represents a growth of 103.2% or RM99.7 million.
The increase is attributable to the surge in sales volume contributed from both Machine Vision System (“MVS”) and Automated Board Inspection (“ABI”).
On a quarter-on-quarter basis, Vitrox’s revenue was up 51.1% from RM129.9 million in the immediate preceding quarter.
2. Q2 net profit more than doubled
Vitrox’s Q2 net profit more than doubled to a record RM50.6 million, from RM22.9 million, a year earlier. Earnings per share for the quarter rose to 10.7 sen from 4.9 sen in the preceding year.
On a quarter-on-quarter basis, Vitrox’s net profit was up 65.0% from RM30.7 million or 6.5 sen per share in the January-March quarter.
3. Healthy balance sheet and cash flow
The group’s financial position remains healthy as it is in a net cash position as at 30 June 2021.
The group generated net cash from operating activities of RM16.8 million for the six months ended 30 June 2021.
Furthermore, the group achieved free cash flow of RM11.2 million over the same period.
4. Vitrox buys land worth RM48.3 million
Vitrox’s wholly-owned subsidiary Vitrox Technologies Sdn Bhd (“VTSB”) had entered into a sales and purchase agreement with Penang Development Corporation to purchase land worth RM48.3 million in Penang to executive its 10-year expansion master plan, which will be fully completed by 2030.
The land – at present vested in the State Authority of Penang – measures 21.0 acres and is marked as Plots 323b and 323c in Batu Kawan Industrial Park, Seberang Perai Selatan.
With the acquisition, Vitrox envisages that it will further strengthen its technology, product research and development, global business expansion, worldwide service and support, supply chain development, smart and lean manufacturing, and talent attraction, training and growth.
5. Vitrox ventures into precision smart farming
Last year, Vitrox started a series of R&D activities in precision smart farming, under its newly set up 70%-owned subsidiary ViTrox Agritech Sdn Bhd.
The group intends to develop agriculture solutions that address pressing challenges such as high dependence on foreign labour, unreliable yields impacted by unpredictable weather conditions and excessive use of pesticides in the country.
Towards this end, Vitrox is investing about RM5.0 million for its first hi-tech farm cluster in Ara Kuda, Penang.
The global agriculture robot market is set to grow by a compound annual growth rate of 34.5% from 2020 to 2025.
Vitrox co-founder, CEO and president Chu Jenn Weng opined that food safety, food security and global warming will be major issues 10 year from now. “If we successfully develop precision smart faming, we may be able to solve the global hunger crisis,” he says.
Vitrox is optimistic on its business prospects for the financial year 2021 with the acceleration of digital adoption and transformation throughout the world amidst the Covid-19 pandemic.
In the next 6 months, the group will continue to focus on capacity expansion, aggressive material sourcing and securing, supply chain collaboration, key markets expansion, new product innovation, and Covid-19 risk mitigation to support the robust demand from various sectors, especially in 5G, Electric Vehicles (“EV”), Computing and Artificial Intelligence (“AI”).
Group CEO, Chu Jenn Weng, said that strong demand for the group’s products would continue into 2022 because of the global shortage of semiconductor components, a situation likely to persist till next year.
“The machine vision system market, estimated to be about US$12.3 billion (RM50.5 billion) in 2020, is expected to expand at a compounded annual growth rate (CAGR) of 6.9% from 2021 to 2028, driven by the demand for quality inspection and automation in different industrial verticals.”
“The need for vision-guided robotic systems across the automotive, food and beverage, pharmaceutical and chemical as well as packing segments is expected to fuel market growth.”