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Memtech Q4 profit falls 6.5% to US$3.76m

ELECTRONICS components manufacturer Memtech International posted a 6.5 per cent drop in profit to US$3.76 million from the previous year, dragged down by lower sales from its consumer electronics and telco segments, as well as higher staff costs and foreign exchange losses.

In a Singapore Exchange filing after the market closed, the group posted a 3.5 per cent increase in revenue to US$49.61 million for the fourth quarter of 2017, led by the group's automotive segment, which recorded a 14.5 per cent yearly increase to US$24.7 million.

Revenue from the group's industrial and medical segment increased by 62.8 per cent year-on-year to US$4.2 million.

However, its consumer electronics and telco segments declined 12.1 per cent and 15.7 per cent year-on-year to US$15.5 million and US$5.1 million respectively due to an "increasingly competitive business landscape", the group said.

The decline in segmented revenue, Memtech said, was due to lower demand from certain customers as they refreshed product lines and transitioned to newer models and products.

Administration expenses also increased by 9.8 per cent due to salary revisions, Memtech said.

Overall in FY2017, the group clocked profit attributable to owners of the company of US$14.13 million, up by 125.3 per cent from the previous year, on a 6.9 per cent increase in revenue to US$170 million.

Memtech said that the increase in gross profit was due mainly to a shift towards higher margin products and improved operational efficiency through automation.

A one-off disposal gain of US$3.2 million from the sale of the group's land and factory in Huizhou, China also helped to boost its other operating income to US$5.8 million for FY2017.

Earnings per share was down slightly by 6.9 per cent to 2.7 US cents, while net asset value per share was up 14.8 per cent to 90.1 US cents.

"This year's financial performance reflected the strong operational execution of strategic initiatives focused on improving earnings quality," said executive chairman Chuang Wen Fu, adding that the group will continue to pursue process automation and enhance operational efficiency.

Mr Chuang also highlighted that the group has begun preparations with a "major US multinational customer" for projects which are expected to ramp up in the second half of FY2018.

Memtech concluded that it remains "cautiously optimistic" of its performance for the financial year ending Dec 31, 2018.

The counter closed at S$1.37 on Tuesday, down one Singapore cent or 0.73 per cent.