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Micro-Mechanics Q1 profit falls 27.4% on lower revenue, higher costs

MICRO-MECHANICS (Holdings) said its first-quarter net profit fell 27.4 per cent to S$3.3 million from S$4.5 million a year ago on lower revenue and higher depreciation, personnel and equipment maintenance costs.

For the three months ended Sept 30, the mainboard-listed firm's revenue slid 9.1 per cent to S$15.3 million from S$16.9 million.

Earnings per share was 2.35 Singapore cents, down from 3.24 cents a year ago, the firm reported in a bourse filing on Wednesday.

As with last year's first quarter, no dividend was declared for Q1 2020.

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At its annual general meeting to be held on Wednesday, Micro-Mechanics will be seeking shareholders’ approval to pay a final dividend of 5 cents per share and a special dividend of 1 cent per share for FY2019.

If approved, the group’s total dividend payout for FY2019 would be 10 cents per share, the same as FY2018 despite slower business conditions caused by the semiconductor industry’s downturn.

The group designs and manufactures precision tools, assemblies and consumable products for the semiconductor industry.

Chris Borch, CEO of Micro-Mechanics, said: "The current downturn in the global semiconductor industry continued to affect the group’s performance during Q1 2020. Although the group’s financial results in the first quarter were lower year on year, it is notable that our revenue and net profit recorded sequential growth for the first time since Q1 2019 and were also higher compared to each of the last three quarters of FY2019."

"Going forward, we intend to continue working to enhance the efficiency of our operations and focusing on parts and tools that offer opportunities for attractive profit margins," he added.

As at Sept 30, Micro-Mechanics maintained a healthy financial position with total assets of S$73 million, shareholders’ equity of S$61.9 million, cash and cash equivalents of S$24.3 million and no bank borrowings, the company said.

Micro-Mechanics' shares, trading cum dividend, were down S$0.04 or 2.2 per cent to S$1.81 as at 1.45pm.