PETALING JAYA: JOTECH HOLDINGS BHD [ ] expects its resources industry to be the growth impetus for profit this year as it diversifies its risk from its core business in precision metal stamping.

It said on Thursday, May 27 investment in resources industry would generate a new income stream that would enhance the profit. In financial year 2009, it acquired an equity stake in a mining company with coal concession in Kalimantan.

“This investment is expected to contribute earnings to the group from financial year 2011 onwards,” it said in a statement after its AGM. It added RM5 million was allocated as capital expenditure to expand capacity this yea.

“Jotech`s regional expansions over the past years have started to pay off with its subsidiaries in Indonesia and China contributing strongly to the group. The contribution by overseas subsidiaries is expected to further increase stemmed from stronger economic recovery foreseen in these countries,” it said.

For the first quarter ended March 31, 2010, Jotech posted RM1.54 million net profit versus a net loss of RM949,000 a year ago. The turnaround was due to its precision stamping operations in Indonesia.

It added that its investment in associate AIC CORPORATION BHD [ ] has also contributed RM500,000 share of net profit compared to RM200,000 share of net loss a year earlier.

Its revenue jumped 55.8% to RM30.88 million from RM19.82 million, while earnings per share was 0.17 sen versus a loss of 0.10 sen.  - The Edge, Malaysia