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Frencken Q3 net profit more than doubles on lack of impairment losses
MAINBOARD-LISTED equipment service provider Frencken Group saw net profit surge in the third quarter on the absence of the previous year's one-off costs, as per results out on Wednesday.
Net profit jumped to S$11.4 million for the three months to Sept 30, more than double the S$5.26 million in the year-ago period, when Frencken chalked up S$4.05 million in exceptional impairment losses. Earnings per share stood at 2.7 Singapore cents against 1.25 cents before.
Revenue rose by 3.8 per cent year-on-year to S$170.2 million, as higher sales in the mechatronics division - which was led by industrial automation and semiconductors - more than made up for a broad decline in integrated manufacturing services.
In particular, the industrial automation segment, where business is typically lumpy, grew by 23.3 per cent, thanks to a key customer's purchase of storage drive production equipment, while the semiconductor segment improved on more orders for front-end and back-end equipment.
Meanwhile, for the nine months, net profit was up by 63.8 per cent to S$31.1 million, while revenue grew by 9.7 per cent to S$493.6 million.
Frencken noted in its outlook statement that the business environment is expected to stay challenging in the year-end period, amid global economic uncertainties.
It expects year-on-year revenue growth in the fourth quarter for the semiconductor and medical segments, but anticipates a decline in the lumpy industrial automation segment, as well as in the analytical segment, where its major client is looking at softer semiconductor end-demand.
No dividend was recommended, unchanged from the year before.
Frencken shares closed up by S$0.01 or 1.41 per cent to S$0.72 before the results were released.