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InnoTek's Q1 profit plunges 96%
PRECISION metal components manufacturer InnoTek Limited's first-quarter net profit plunged 96 per cent to S$117,000 from S$2.5 million in the year-ago period.
Earnings per share fell 96 per cent to 0.05 Singapore cent, from 1.13 Singapore cents last year.
No dividend has been declared for the current financial period, unchanged from the preceding year.
As at 11.26am on Wednesday, the counter was trading down 8.24 per cent, or 3.5 Singapore cents to 39 Singapore cents apiece.
For the three months ended March 31, net profit for the group's subsidiary Mansfield Group (MSF) fell 72 per cent to S$800,000 from S$2.8 million in the same quarter last year.
This was mainly due to an increase in expenses, including startup costs from newly incorporated units Mansfield Wei Hai and Mansfield Thailand, and expenses incurred for new programmes with mass production expected to begin in the second half of this year or 2019. Furthermore, competitive price resulted in lower margins for its TV back panels, the group said.
Separately, the Q1 net loss of the group's other subsidiary - similarly named InnoTek - almost tripled from S$219,000 last year to S$655,000. This was in part due to a net investment portfolio loss of 18 per cent as equity and bond prices were affected by the US-China trade war in the first quarter this year, the group said.
The group's first-quarter revenue also fell 6.8 per cent to S$47.6 million. However, in terms of sales in Hong Kong dollars, its revenue increased by one per cent to HK$279.9 million (S$47.3 million).
This was attributed to the weakening of the HK dollar/Singdollar in Q1 2018 at 5.936, compared to 5.477 in Q1 2017, the group said. In terms of HK dollars, the marginal increase in revenue was mainly due to greater contributions from its precision components segment, offset by a slight decrease from its precision machining segment.
Looking ahead, the group remains cautious about its outlook for fiscal 2018. The group expects its TV segment, which accounted for 30 per cent of Q1 2018 revenue to remain stable, but also warned of future price competition. It is also pursuing collaborations with global automotive suppliers in order to improve its market share and suite of offerings.
Said the group's CEO Lou Yiliang: "We are mindful of challenges in the operating environment and will double down on efforts to minimise expenditure while ramping up production... Even as we refine our manufacturing operations and technical capabilities to sustain growth, we will also engage with new and existing clients to remain competitive."