Nico Steel posts US$121,000 H1 profit; starts production of 3 new alloy products

MAINBOARD-LISTED Nico Steel Holdings saw net profit jump to US$121,000 for the half-year ended Aug 31, 2018 from about US$1,000 a year ago on increased production and sales of its metal alloy materials which command a higher gross profit margin, the company announced on Monday morning.

Revenue climbed 30.8 per cent to US$8.0 million from US$6.1 million in the year ago period, although the gains were partially offset by higher operating expenses and forex (foreign exchange) losses. Earnings per share was 0.005 US cent, from essentially nil in the previous year.

"We are encouraged that our strategy and efforts to focus on higher value-add metal processing services, including marketing our proprietary Nico brand of customised metal alloy products to both new and existing customers, are paying off," said Nico Steel executive chairman and president Danny Tan.

He added that Nico's customised metal alloys are gaining acceptance in the consumer electronics market, and the company expects the growing trend of high-speed data transmission to drive demand for its multi-functional metal alloys.

Nico Steel's metal alloys made up 32 per cent of revenue for the first half of FY2019, and revenue from such products increased 72 per cent year on year. The remaining 68 per cent of its revenue come from its customised solutions business, which drew 17 per cent more revenue than it did a year ago.

In a separate announcement on Monday morning, Nico Steel said it has commenced mass production of its metal alloys for shielding purposes in three new electronic devices from two customers.

For the first company, described in Nico's announcement as the world's largest software company, Nico will supply metal alloy materials for two laptop models. The other company, said to be the world's largest drone manufacturer, will use Nico's product in a new drone model.

Following the announcements, Nico Steel shares were trading at S$0.006 as at 9.37am, down 0.2 Singapore cent or 25 per cent.