ISDN H2 net profit rises to S$13.3m, proposes S$0.0145 final dividend

ISDN HOLDINGS reported a net profit of S$13.3 million for the second half of the fiscal year ended December, up from earnings of S$5.6 million in the corresponding year-ago period.

This boosted the group's earnings for the full FY2021 to S$25.5 million, up 68.3 per cent from earnings of S$15.1 million in FY2020.

The board of directors have recommended a final dividend of S$0.0145 per share, up from S$0.008 in FY2020. The dividend is payable on or around Aug 26, upon the approval of shareholders at the upcoming annual general meeting. The books close on Jul 7.

Revenue for H2 was up 14.5 per cent to S$223 million from S$194.7 million. Cost of sales rose in tandem, rising 14.5 per cent to S$160.8 million.

Consequently, gross profit was up 14.7 per cent to S$62.2 million, while gross profit margin held steady at 27.9 per cent.

ISDN's revenue for the full year rose 21.6 per cent to S$440.1 million, another record for the group, which attributed its topline growth to its long-term growth strategy, particularly the company's efforts to expand from just components to modules and systems. The company is also delivering Industry 4.0 software and cloud solutions, it noted.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

ISDN is targeting diversified growth industries such as advanced medical devices, electronics and semiconductors manufacturing, as well as digital transportation. The group said overall revenue was driven by continued strong demand for industrial automation in both China and South-east Asia, including Hong Kong, Malaysia, and Vietnam.

The group's other operating income for H2 rose to S$6.0 million, due chiefly to a gain on disposal of S$2.2 million for its Singapore offices at Kaki Bukit after the company acquired a leasehold property to consolidate its 7 Singapore offices into a single larger workspace.

Distribution costs for H2 was up 11.4 per cent to S$15.3 million due to a rise in staff and related costs on the back of higher staff commission to sales personnel, which is in line with the increase in revenue, lesser monies from the Jobs Support Scheme, the absence of the Chinese government's Covid-19 support, as well as the accrual of share-based payment to recognise exceptional achievements and retains talents.

Looking ahead, ISDN said it will deepen technological capabilities as it continues to see customer demand for large-scale industrial systems and software solutions, in addition to the growth in its core industrial automation hardware business.

The expansion into advanced industrial software and systems will give the company new opportunities to enhance its business model by increasing recurring revenue from software and cloud solutions, and to improve profitability, given that advanced industrial business carries stronger profit margins.

In response to sustained demand from customers, the group is also looking to ramp up its production capabilities by constructing another building in its industrial park campus in China. This will add 39 per cent in gross floor area to the campus.

ISDN also continues to explore accretive opportunities to accelerate its strategic growth through mergers and acquisitions, it added.

Shares of ISDN ended Friday at S$0.65, up 3.2 per cent or S$0.02.