Micro-Mechanics Q2 net profit rises 24.6% to S$4.5m

MICRO-MECHANICS Holdings, which manufactures high-precision tools and parts used in the semiconductor industry, on Friday posted a net profit of S$4.5 million for the three months ended Dec 31, 2020, up 24.6 per cent from S$3.6 million a year ago.

The results translate to earnings per share (EPS) of 3.2 Singapore cents for the second quarter, from 2.57 cents the year before.

Revenue was up 15.2 per cent to S$18.7 million, from S$16.3 million a year ago. This came on the back of buoyant growth of the semiconductor industry, Micro-Mechanics said in a bourse filing.

For the half year ended Dec 31, net profit rose 33 per cent - to S$9.1 million from S$6.8 million the year before. Revenue was up 16.7 per cent to S$36.9 million, from S$31.6 million a year ago.

The board has declared an interim dividend of six Singapore cents per share for FY2021, up from an interim dividend of five cents in FY2020. The dividend will be paid on Feb 25.

Micro-Mechanics' chief executive Chris Borch said the group witnessed higher sales in the majority of its geographical markets, with double-digit growth in its top three markets - China, the United States and Malaysia.

Mr Borch said the semiconductor industry may be entering a "supercycle" of multi-year growth powered by skyrocketing demand for computers, mobile devices and data centres, as well as the proliferation of applications for chips.

Given the industry's positive outlook and after relatively modest capital spending over the last two financial years, Micro-Mechanics is accelerating its plans for several key investments. This resulted in an increase in capital expenditure to S$5.3 million in H1 2020. The investments include the development of new machining technology at its factory in the US.

Shares of mainboard-listed Micro-Mechanics closed at S$3.64 on Friday, down 2.4 per cent or S$0.09.