CDW posts US$46,000 9M profit, reversing year-ago loss

JAPANESE-MANAGED precision-components maker CDW Holding made a US$46,000 net profit for the nine months ended September, reversing the US$1.94 million loss from a year ago.

Its revenue for the period rose 7.9 per cent year on year to US$76.18 million, the mainboard-listed firm disclosed in a Wednesday business update filed with the bourse.

Its turnaround was fuelled by a recovery in the LCD backlight units segment, particularly, in orders for larger-sized backlight units used in ultrathin notebook computers and automobile information displays of premium vehicles. Revenue for this segment rose 37.9 per cent to US$56.4 million.

CDW expects a higher number of orders for larger LCD backlight units, as displays become commonplace in automobiles.

However, revenue from the office automation and LCD parts segments fell 40.5 per cent to US$9.7 million and 24.4 per cent to US$9.3 million respectively. The F&B and life sciences arm made US$800,000 in revenue.

CDW continues to see a "challenging business environment" with Covid-19 and tensions between the US and China. The office automation, and LCD parts and accessories segments continue to face intense price competition, as well as lower revenue due to model obsolescence or phasing out, CDW said.

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In particular, the manufacturing business for mobile-payment devices, which is part of the LCD unit, continues to face stiff price competition from Chinese suppliers. In response, CDW has removed non-competitive models and is moving the bulk of its operations to a new facility in the Philippines.

"However, with Covid-19 pandemic-related restrictions in the Philippines, production has been subcontracted to a partner in Thailand as the group's customer for mobile point-of-sale devices has increased order volume substantially for the coming two quarters," it said.

Shares of CDW closed at S$0.173 on Wednesday, up 22.7 per cent.