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Combine Will swings into the red for Q4; proposes dividend of 5 Singapore cents/share

COMBINE Will International has sunk into the red with a net loss of HK$47.6 million (S$8.2 million) for the fourth quarter ended Dec 31, 2018 from a HK$7.6 million profit for the year-ago period.

Its loss per share (LPS) was 147.29 Hong Kong cents, from an earnings per share (EPS) of 23.55 Hong Kong cents. Its shares closed flat at S$1 on Thursday.

It has proposed a dividend of five Singapore cents per ordinary share, with no dividend declared the previous year.

Revenue for the three months stood at HK$342.4 million, a 15.2 per cent drop from HK$403.8 million, said the original design manufacturer/original equipment manufacturer (ODM/OEM) of corporate premiums, toys and consumer products.

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Fiscal 2018 net profit came in at HK$52.7 million, five times the HK$10.5 million net profit for the previous year, due to the group's in-process re-engineering efforts. Revenue was HK$1.56 billion, a 14.6 per cent increase from HK$1.36 billion. Annualised EPS was 163.16 Hong Kong cents, up from 32.45 Hong Kong cents.

The group's core ODM/OEM segment saw a 20.1 per cent improvement in annual revenue with a 41.9 per cent jump in gross profit due to increased orders from core customers and productivity enhancements.

Revenue for moulds and toolings fell by 6.8 per cent due to the relocation of a factory in the first half of the year, while revenue for machine sales fell by 14.1 per cent due to fewer orders.

For FY2018, ODM/OEM accounted for HK$1.27 billion of the group’s total revenue, machine sales contributed HK$121.6 million, and moulds and tooling contributed HK$42.5 million.

The group has undertaken a strategic review of its corporate structure and lines of business in 2018. It will "focus on the cessation or divestment of less profitable business operation units, and concentrate on the more substantial and currently profitable business segment and new business initiatives with solid growth potential".

With the restructuring and streamlining exercise completed as scheduled, the group expects to have a profitable FY2019.