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JEP Holdings fiscal 2018 profit up 2.7 times to S$2.2m on lower administrative costs
JEP Holdings has recorded a net profit of S$2.2 million for the full year ended Dec 31, 2018, up almost 2.7 times from S$825,000 the year before, on the back of lower administrative expenses, the precision machining and engineering services provider said in a regulatory filing on Monday after the market closed.
Earnings per share was at 0.578 Singapore cent, up from 0.227 cent the year before. Net asset value per share for the group was at 13.2 cents, up from 13 cents the year prior. The company did not declare any dividends, unchanged from the previous year.
Revenue for the full year was 0.3 per cent lower at S$85.9 million, from S$86.1 million the year before. The group’s equipment manufacturing segment posted lower revenue at S$1.1 million; similarly, revenue from the trading and others segment was lower at S$1.7 million. However, higher revenue from the group’s precision manufacturing segment, at S$2.6 million, offset the fall.
Administrative expenses decreased S$2.4 million or 27.5 per cent to S$6.3 million, from S$8.7 million the year before. This was mainly attributed to the absence of one-time expenses of S$2.2 million in relation to leased premises surrendered in December 2017, and amortisation of intangible asset of S$0.6 million which were partially offset against retirement packages of S$0.5 million paid to the former executive chairman in fiscal 2018.
Cost of sales decreased 3.8 per cent or S$3.0 million to S$73.2 million, from S$76.2 million the year before. The decrease in cost of sales was in tandem with the lower revenue from equipment manufacturing, trading and other segments, and the absence of one-time expenses in relation to leased premises surrendered in December 2017.
Gross profit increased by 26.8 per cent or S$2.7 million to S$12.6 million, from S$9.9 million the year before. The gross margin in fiscal 2018 improved by 3 per cent to 15 per cent, from 12 per cent the year prior primarily due to higher gross margin profit generated from precision manufacturing segment.
In terms of outlook, the group said its main revenue stream will still come from the aerospace segment. The global aerospace industry experienced a solid year as passenger travel demand is expected to grow at 7 per cent annually, and aircraft order backlog remains at an all-time high, enticing manufacturers to ramp up production.
Its oil and gas segment "remains challenging and uncertain" largely due to a shortage of projects despite signs of recovery in oil prices. Thus, the group is on the lookout for positive developments in this segment and has recently received several orders from existing customers.
Meanwhile, JEP is confident its equipment manufacturing segment will achieve growth largely due to its well-diversified customer bases, despite slowdowns in the semiconductor industry and the US-China trade tension.
Shares for the company last closed on Monday at S$0.157 apiece.