KUALA LUMPUR (May 26): D&O Green Technologies Bhd (KL:D&O) posted its third consecutive quarterly net loss, weighed down by margin compression, inventory impairment and foreign exchange (forex) losses.
The group, which manufactures light-emitting diodes (LEDs) for the automotive industry, recorded a net loss of RM58.62 million for the first quarter ended March 31, 2026 (1QFY2026), compared with a net profit of RM356,000 a year earlier.
In its filing with Bursa Malaysia, D&O said gross margin narrowed sharply to 4.9% from 15.8% previously, “mainly due to lower production loading and non-cash inventory valuation adjustments arising from cost remeasurement, based on a 12-month rolling average costing methodology”.
Inventory impairment jumped over 11 times to RM32.1 million from RM2.72 million, while the group recorded a forex loss of RM7.47 million versus a forex gain of RM3.36 million previously.
Quarterly revenue declined 6.35% to RM225.53 million from RM240.82 million, mainly due to weaker automotive market conditions, particularly in China and selected European markets, amid softer vehicle sales and cautious inventory management across the supply chain.
No dividend was declared for the quarter under review.
The group said it has implemented margin enhancement initiatives, including cost optimisation, headcount rationalisation, procurement improvements, supplier diversification, yield enhancement and increased automation to strengthen manufacturing efficiency.
These measures are expected to improve cost structure resilience and support margin recovery as production volumes normalise, it said.
The group expects LED sales performance in the second quarter of 2026 to remain broadly stable, supported by encouraging design-in activity and secured design wins.
“Management will continue to emphasise operational discipline, selective capital allocation and quality control, while focusing on yield enhancement, material utilisation efficiency and unit cost optimisation,” it added.
At Tuesday’s closing bell, shares of D&O were half a sen or 1.12% lower at 44 sen. This gives the group a market capitalisation of RM545.37 million.
theedgemalaysia.com