Trek 2000 International posts 79.7% slide in Q1 net profit to US$112,000

MAINBOARD-LISTED technology company Trek 2000 International, which is facing probes by the police and bourse operator, on Tuesday reported a sharp drop in first-quarter earnings.

Net profit came in at US$112,000 for the three months to March 31, down by 79.7 per cent on the US$552,000 clocked the year prior, while revenue fell 48.9 per cent to US$4.29 million.

Earnings per share came in at 0.03 US cent against 0.17 US cent previously, while net asset value was 13.95 US cents, compared with 13.77 US cents as at Dec 31, 2018.

No dividend was recommended, unchanged from the previous year, with the board saying that Trek 2000 "will not be declaring dividend as the company continues to invest in research and development on the latest technology" while it hunts for business expansion opportunities.

The thumbdrive maker said it would use its net cash and investment positions to fund "business expansion and higher returns in the short and long term", while also looking at strategic partnerships and tackling consumer wearable, medical and cloud technologies markets.

"The group foresees the industry to remain challenging in the next 12 months as the current market situation is expected to continue," it said in its outlook statement.

"In this difficult period, the group will be selective in exercising priority on projects based on their profitability, and dealing with customers (sic)."

Trek 2000 added in a cautionary statement that "as previously announced, the company is cooperating with the CAD in its ongoing investigations relating to document deficiencies".

The Commercial Affairs Department (CAD) began investigations in 2016 into transactions that were later flagged in a report by forensic accountants from RSM Corporate Advisory.

Trek 2000 has said that it may have to make changes to financial statements for FY2015 and FY2016, depending on the outcomes of the police probe and a bourse notice of compliance.