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Cheung Woh posts loss of S$449,000 in Q3FY18

HARD disk drive manufacturer Cheung Woh Technologies sank into the red with a net loss of S$449,000 for the third quarter of financial year 2018, compared to a profit of S$264,000 in Q3 FY2017.

Turnover edged up 5.8 per cent year on year to around S$21.55 million bolstered by higher sales in the hard disk drive (HDD) components segment. However, cost of sales rose nearly 16 per cent to S$19.63 million on the back of higher materials and labour costs incurred.

The company registered a loss per share of 0.15 cent, compared to earnings per share of 0.09 cent a year ago.

Last week, Cheung Woh issued a profit warning for Q3, as it failed to meet production targets for baseplates, partly due to machinery down-time and repairs after some machines were damaged by heavy rainfall caused by Typhoon Hato. In addition, there was a temporary shortage of manpower as some workers had left after the typhoon.

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The company warned that turnover for baseplates will again be affected in Q4 FY18 due to manpower shortage before and after Chinese New Year, as well as the long shutdown in China for the holidays.

On the other hand, the precision metal stamping components segment is expected to do well, it highlighted.

The group's counter closed 3.4 per cent or 0.6 of a Singapore cent higher at 18.1 Singapore cents, before its earnings were announced.