Frencken Group's Q1 net profit up 10.5% to S$9.5m on forex gain

MAINBOARD-listed manufacturer Frencken Group on Thursday posted a higher net profit for the first quarter despite lower revenue, largely from gains from the US dollar's appreciation against the Singapore dollar. 

Reductions in freight costs, as well as administrative and general expenses also helped. The group did not disclose the amount of those reductions or the foreign exchange gains in its business update on Thursday. 

Net profit was up 10.5 per cent year on year to S$9.5 million for the quarter ended March 31. This was even as revenue fell 4.8 per cent on the year to S$151.4 million, mainly due to lower sales from the automotive, industrial automation and analytical segments. 

As at March 31, the group had total assets of S$530.3 million, including cash and cash equivalents of S$144.6 million. 

Frencken said its factories in Singapore, Malaysia and China have resumed operations following the easing of government restrictions in each country. Only its India factory remains temporarily closed in line with government directives. 

The group expects financial performance for the year to be affected by the novel coronavirus' impact on end-user demand, as well as government measures to curb the spread of the virus. 

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For now, it anticipates that revenue for the semiconductor and medical segments will grow quarter on quarter, while that of the analytical segment is expected to be stable. 

On the other hand, revenue for the industrial automation and automotive segments will likely decline quarter on quarter. 

Shares of Frencken closed down 2.96 per cent to S$0.82 on Thursday before the announcement.