Innovalues' Q1 net profit drops 31.1% to S$3.81m

INNOVALUES' net profit for the three months ended March 31, 2016 sank 31.1 per cent year-on-year to S$3.81 million, while revenue slipped 6.3 per cent to S$27.26 million.

"The decrease in net profit was primarily due to the net foreign exchange transaction loss being recorded for Q1 2016 and the overall decline in revenue," said the precision engineering firm in an announcement on the Singapore Exchange.

Excluding the net foreign exchange transaction loss, the group said it would have reported a net profit of S$4.8 million for the first quarter.

The decline in overall revenue, meanwhile, was mainly due to the decrease in orders in both the Automotive and Office Automation segments.

Earnings per share stood at 1.17 Singapore cents - down from 1.71 cents in the corresponding period a year ago. No dividend was declared.

Innovalues said that despite an uncertain and challenging economic environment, it remains focused on driving growth in the Automotive segment. It added that increasing regulatory standards towards safety, energy savings, and the environment are expected to provide further impetus for growth in this segment.

"As the group expects to increase its annual capital expenditure by more than 20 per cent to S$7 million, barring any unforeseen circumstances, the board of directors remains cautiously optimistic on a stronger second half in 2016," the group added.

There has been speculation that Innovalues has been holding discussions with potential buyers for some time now.

Innovalues shares closed 0.498 per cent or half a cent lower at S$1 per share on Tuesday.