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Foreign exchange loss, retrenchment costs weigh down Sunningdale's Q4 earnings

SUNNINGDALE Tech on Thursday posted a 64 per cent drop in fourth-quarter earnings on the back of a foreign exchange loss and retrenchment costs.

Net profit for the three months ended Dec 31 was S$7.7 million, well down from S$21.5 million for the same period a year earlier.

Excluding a S$2.8 million foreign exchange loss, retrenchment costs, and the absence of an earlier gain from the disposal of property, plant and equipment, net profit would have risen 8.1 per cent to S$10.6 million, the precision plastics components manufacturer said in a filing with the Singapore Exchange.

Earnings per share fell to 4.12 Singapore cents, from 11.42 Singapore cents previously.

Sunningdale has declared a final dividend of 4.5 Singapore cents per share, 33.3 per cent lower than the six Singapore cents paid out before.

This brings total dividends for the fiscal year 2017 to seven Singapore cents, 16.7 per cent higher than six Singapore cents in 2016.

During the quarter, revenue climbed 1.6 per cent to S$187 million on higher turnover from all business segments except for consumer/IT.

The decrease in revenue from the consumer/IT segment was because multiple customers had advanced orders scheduled for the quarter to earlier quarters. A change in materials that were used in production also led to a lower average selling price for certain projects.

Gross profit dipped 0.2 per cent to S$25 million, and gross profit margin decreased to 13.4 per cent, from 13.6 per cent previously.

Net profit for the full year ended Dec 31 slid 19.7 per cent to S$31.4 million, while revenue was up 5.9 per cent to S$724.5 million

Sunningdale chief executive and executive director Khoo Boo Hor noted that while the group's business development initiatives were successful in broadening its product mix and winning new customers, it was impacted by macroeconomic factors beyond control such as foreign exchange volatility.

"Nevertheless, our core business operations remain robust as we continue to streamline our operations," he said.

Mr Khoo added that Sunningdale's global manufacturing footprint will soon span 20 locations across nine countries as it opens a new 15,000 sq m plant in Penang, Malaysia in the first quarter of 2018.

Shares of Sunningdale closed 3.7 per cent or seven Singapore cents higher at S$1.98 on Wednesday.