Higher output and shipments sends Aztech Global's Q1 net profit up 22 times on year

MAINBOARD-listed Aztech Global on Wednesday posted a net profit of S$13.2 million for its first quarter ended March 31, 22 times its net profit of S$0.6 million in the corresponding period last year.

This comes as its revenue increased 210.7 per cent year on year from S$37.3 million to S$115.9 million. Profit before tax also jumped nearly 13 times, from S$1.2 million in Q1 FY20 to S$15.2 million in Q1 FY21.

In a business update, Aztech said that the strong year-on-year revenue growth was driven by higher production volume and shipment of its Internet of Things (IoT) and data-communication products to customers. Manufacturing activities in Q1 FY21 were also higher than the previous year, as facilities were shut down for a shorter period during the Chinese New Year holiday this February to meet higher production needs.

On the other hand, in Q1 FY20, manufacturing activities were affected by a longer shutdown period for the festive season, along with the impact of the Covid-19 pandemic.

Earnings per share for the group rose from 0.09 Singapore cents in Q1 FY20 to 2.01 Singapore cents in Q1 FY21.

Aztech Global, which in March completed its initial public offering (IPO) and made its debut on the Singapore Exchange mainboard, is in the business of IoT and data communication. It manufactures smart devices such as security cameras, climate-control mattresses and GPS dog collars.

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Following the inclusion of net proceeds of S$188.6 million raised from its IPO exercise, the group recorded a net cash position of S$240.1 million as at March 31, a reversal from its net-debt position of S$21.5 million as at end-December last year.

Aztech said that its outstanding order book stood at S$489 million following the close of its Q1 FY21, with majority of the order expected to be completed in FY21.

Additionally, new customers that Aztech had secured in the first quarter come from countries such as Korea, Sweden, Australia and the US.

The global shortage of components is unlikely to ease in the next 12 months, but the group said it is working closely with its customers, suppliers, business partners and relevant stakeholders in "managing the situation towards ensuring smooth production and timely delivery of its customers' orders".

As it is, efforts such as product redesign and innovation to reduce or substitute components have already been taken, noted the group.

Michael Mun, Aztech Global's chairman and chief executive, said: "Taking into consideration the strong order book to date and measures that we have put in place to mitigate the Covid-19 pandemic, the group, barring unforeseen circumstances, is cautiously optimistic of its performance in 2021."