Frencken Q1 net profit up 54.7% to S$14.7m

MAINBOARD-LISTED technology solutions provider Frencken Group on Wednesday posted a first-quarter net profit of S$14.7 million, up 54.7 per cent from S$9.5 million a year earlier, led by improved sales from its semiconductor segment.

The 19.9 per cent improvement in revenue to S$181.5 million from S$151.4 million year was driven by contributions from the core mechatronics division.

Sales from the mechatronics division jumped 21.6 per cent to S$154.1 million, thanks to a 58 per cent increase in sales from the semiconductor segment to S$65.9 million. The medical and analytical segments also recorded higher sales while the industrial automation segment sales eased slightly.

Meanwhile, the integrated manufacturing services made up S$27.3 million of total revenue, up 9.9 per cent year-on-year due to improved sales from the automotive segment. The consumer and industrial electronics segment, on the other hand, remained stable.

The group's gross profit rose 32.6 per cent year-on-year to S$31.3 million in the first quarter while gross profit margin expanded 1.7 percentage points to 17.3 per cent from 15.6 per cent the previous year as a result of higher sales, shift in sales mix and higher operational efficiencies.

As at March 31, 2021, the group's total assets stood at S$595 million including cash and cash equivalents of S$164.6 million. Total liabilities was S$244.4 million, consisting of S$70.9 million in total borrowings.

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The group had shareholders' equity of S$348.0 million, which is equivalent to net asset value of 81.5 cents per share. It added that it remains in "sound financial position" with net cash of S$93.7 million.

"The operating landscape is expected to remain challenging and uncertain as new Covid-19 infections and variants will continue to weigh on the outlook of the global economy," said the group in its Q1 business update.

Still, Frencken is expecting its revenue for the half-year to improve due to higher sales from the majority of its key business segments, including semiconductor, medical, analytical, industrial automation and automotive.

Shares of Frencken ended Wednesday at S$1.42, up S$0.07 or 5.2 per cent.