Valuetronics FY19 profit down 2.6%, to pay out 20 HK cents per share

MAINBOARD-LISTED Valuetronics Holdings' net profit declined 2.6 per cent to HK$199.5 million (S$35.1 million) for the year ended March 31, from HK$204.7 million a year ago, amid mixed performance from its two business segments.

This translates to an earnings per share of around 46.2 HK cents for FY2019, down from 48.1 HK cents for the previous year, the electronics manufacturing services firm said on Wednesday morning.

It proposed a final dividend of 15 HK cents per share and a special dividend of five HK cents per share for FY2019. Both are subject to shareholders' approval at the upcoming annual general meeting. The company will announce the dividend payment date later.

Together with the interim dividend of five HK cents per share paid last December, aggregate dividend for FY2019 will reach 25 HK cents per share, about 54.4 per cent of the net profit attributable to shareholders for the fiscal year.

Revenue inched down by 0.9 per cent to HK$2.83 billion for the year.

But gross profit grew 3.8 per cent to HK$430.3 million amid a 0.7 percentage point increase in gross profit margin to 15.2 per cent for FY2019 due to a change in sales mix.

Revenue from the consumer electronics segment shrank 16.9 per cent to HK$1.2 billion from a year ago because of the slowdown in orders for smart LED lighting products.

But this was offset by a 14.6 per cent growth in FY2019 revenue from industrial and commercial electronics (ICE) to HK$1.67 billion, amid strong demand from existing and new customers.

Valuetronics has identified Vietnam as a location to expand its production outside of China, amid continued US-China trade tensions, said Ricky Tse Chong Hing, chairman and managing director of the company.

Valuetronics said it has been "working closely" with one of its customers to explore manufacturing solutions at a leased site in Vietnam. That customer is expected to qualify this initial setup by the end of June 2019, which will be followed by mass production for shipment from Vietnam to the US market.

The group may further expand its Vietnam production capacity by building its own manufacturing facilities, depending on how US-China trade tensions develop.

Meanwhile, Valuetronics said it will continue to expand its footprint in North America through exploring merger and acquisition opportunities.

Valuetronics shares closed unchanged at 60.5 Singapore cents on Tuesday.