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Battery maker GP Industries Q2 profit down 3.8%

BATTERY maker GP Industries on Monday posted a 3.8 per cent fall in second-quarter net profit, on the back of higher distribution and finance costs, as well as lower other operating income. 

For the three months ended Sept 30, net profit stood at S$6.9 million, down from S$7.1 million in the year-ago period. Decline in other operating income for the quarter was mainly due to a "decrease in gain on disposal of property, plant and equipment and government grant", GP Industries said. 

On a per share basis, earnings for Q2 came in at 1.41 Singapore cents, down from 1.47 Singapore cents last year. 

A cash dividend of 1.25 Singapore cents per share has been declared for the current financial period, unchanged from the preceding year. 

Revenue for the quarter rose 4.5 per cent to S$307.9 million, up from S$294.6 million a year ago. 

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Separately, for the half-year period ended Sept 30, net profit attributable to equity holders of the company rose 12 per cent to S$14 million, up from S$12.5 million in the year-ago period. This translates to an earnings per share of 2.90 Singapore cents, up from 2.59 Singapore cents. 

Revenue for the six-month period also increased 4.5 per cent to S$595 million, thanks to a 6.4 per cent growth from the group's batteries business. 

Notably, the strengthening of the US dollar against the Chinese yuan in the first quarter of fiscal 2019, contributed to a net exchange gain of S$6.7 million in H1 FY2019, reversing a net exchange loss of S$4.5 million in H1 FY2018. A weakened yuan is generally favourable to the group's export-oriented businesses from China, GP Industries said. 

Looking ahead, the group noted that the US-China trade dispute will "cast significant uncertainties" on its business outlook. Nonetheless, slightly less than 10 per cent of its businesses, comprising battery products and automotive wire harnesses, are subjected to additional tariffs imposed by the US, based on the announced US import tariff scheme, the company said. 

Separately, the group is also expanding the capacity of its manufacturing facilities in Malaysia and Vietnam to take up more of the group’s US export businesses.

Shares in GP Industries last traded flat at S$0.675 apiece on Nov 2. 

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