Aztech Global Q1 net profit rises 5% amid IoT, data communication products demand

MAINBOARD-LISTED Aztech Global : 8AZ 0% posted a 5.3 per cent rise in net profit to S$13.9 million year on year for the three months ended Mar 31.

In its business update on Monday (Apr 18), revenue for the design and manufacturing services provider increased 10.4 per cent to S$128 million year on year. The group attributed its performance to strength in Internet-of-Things (IoT) devices and data communication products demand.

Notably, the company said that revenue from IoT devices and data communication products rose 16.4 per cent to S$123.7 million year on year, accounting for 96.6 per cent of the group’s total revenue.

However, inflationary cost pressures negated some of the improvement in revenue and led to margin compression of between 60 and 110 basis points for earnings before interest, taxes, depreciation and amortisation (Ebitda), pre-tax profit and net profit year on year in its Q1 FY2022.

Aztech Global noted that it remains in a strong net-cash position of S$289.3 million as at Mar 31. Net asset value also increased S$0.02 to S$0.40 per share from S$0.38 as at Dec 31, 2021.

It also said that its order book remained strong at S$677.4 million as at Mar 31, with an additional S$35.6 million in orders added as on Monday. A majority of the orders are scheduled for completion in 2022.

The group said that it has been managing customer orders and balancing them across its manufacturing plants worldwide as it acknowledges that its operations remain vulnerable to new Covid-19 outbreaks and lockdowns in China.

It expects that its business will benefit from the global demand for IoT devices, data communication products and smart-lighting solutions.

Shares of Aztech Global closed at S$1.00 on Monday, up S$0.05 or 5.3 per cent, before the business update.