Aztech Global H2 net profit falls 46% on foreign exchange losses

TECH solutions provider Aztech Global reported a 45.9 per cent fall in net profit to S$24.3 million for the second half of the year ended Dec 31, 2022, from S$45 million a year earlier. 

Earnings per share for the half year stood at S$0.0315, down from S$0.0588 previously. This was despite revenue rising 21.6 per cent to S$455.7 million, from S$374.7 million the year before. 

In a bourse filing on Friday (Feb 17), the group said the decline in net profit mostly stemmed from foreign exchange losses amounting to S$56.6 million, with several foreign currency contracts maturing in FY2022. 

It highlighted that the bulk of these contracts had been settled as at Dec 31, 2022, and another 2.5 per cent of contracts are expected to be settled in the coming year. 

Excluding the impact of these foreign exchange losses, Aztech Global said net profit would have grown year on year by 66.4 per cent to S$123.8 million. 

For the full year FY2022, revenue climbed 31.4 per cent year on year to S$820.2 million – mainly due to strong revenue growth from the group’s Internet of Things devices and data communications products. This was underpinned by “productivity and operational efficiency gains”, as well as cost-control measures and increase in interest income, it added. 

Aztech Global noted that its net-cash position also remains “healthy” at S$210.9 million as at Dec 31, 2022, up from the previous year’s S$186.8 million. This came even as net asset value slipped marginally to S$0.37, from S$0.38 a year ago. 

The group added that its order book stood at S$633.9 million as at Dec 31, 2022, with an additional S$84.7 million in orders added on Friday. The majority of the orders are scheduled for completion in FY2023. 

As such, Aztech Global remains “cautiously optimistic” for its business, even as supply chain challenges and inflationary cost pressures remain. 

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“The addition of the new Pasir Gudang manufacturing plant in Johor, Malaysia, is timely to support our growth and provide production diversification for our customers’ needs,” said Michael Mun, chairman and chief executive officer of the group. 

Shares of Aztech Global closed at S$0.835 on Friday, up 0.6 per cent or S$0.005, before the earnings release.