Aztech Global earnings up 33.5%, expects to benefit from demand for IoT products

AZTECH Global 8AZ : 8AZ 0% , the technology unit of Aztech Group, on Tuesday (Feb 22) posted a 33.5 per cent increase in net profit to S$74.4 million for the full year ended Dec 31, 2021.

While the global supply chain remains vulnerable to disruptions amid the ongoing pandemic, Aztech Global is looking to drive growth and diversify across multi-sectors powered by the Internet of Things (IoT) trend, it said in its financial statement.

Revenue came in S$624.4 million, 28.9 per cent higher than the S$484.3 million the year before, largely due to the huge jump in fourth-quarter revenue.

Despite the tough operating environment posed by the global logistical and component challenges, revenue for the fourth quarter rose 65.3 per cent quarter-on-quarter and 5.2 per cent year-on-year to S$233.7 million.

IoT devices and data-communication products were the key growth drivers with the segment advancing 39.5 per cent to S$597 million, accounting for 95.6 per cent of total revenue.

Earnings per share for the period was 10 Singapore cents, up from 9.01 cents the year before.

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The group's net asset value per share for FY2021 came in at 38 cents as at Dec 31, 2021 versus the 6.73 cents the year before.

The board has recommended a final dividend of S$0.05 a share for FY2021, subject to shareholders' approval. A final dividend of S$0.02 was declared for for FY2020.

The Q4 revenue growth and initiative to phase out labour-intensive products had also led to a 48 per cent quarter-on-quarter increase in earnings before interest, taxes, depreciation and amortisation (Ebitda) to S$33.9 million while the full-year Ebitda grew 25.6 per cent to S$95.8 million.

Meanwhile, Aztech Global said, the preferential tax treatment at its operations in Dongguan, China and tax grant received for automation equipment had resulted in a 370 basis point reduction in effective tax rate to 12.5 per cent for FY2021 and lifted net profit margin by 40 basis points to 11.9 per cent.

The group's cash and bank balances stood at S$201.5 million while total borrowings more than halved to S$14.7 million. Including the net proceeds of the S$188.6 million raised from its initial public offering exercise in March last year and after deducting net cash dividend payment, the group's net cash came in at S$186.8 million as at Dec 31, 2021.

The group's order book at end-2021 was S$495.8 million. It has since secured additional orders of S$266.2 million as at Feb 22, taking its order book to S$762 million for FY2022.

Shares of Aztech Global ended Tuesday S$0.025 or 2.7 per cent lower at S$0.915.