Valuetronics H1 net profit falls 12.1% to HK$91.5m on lower revenue

VALUETRONICS Holdings on Wednesday posted a 12.1 per cent drop in net profit to HK$91.5 million (S$15.9 million) for the six months ended Sept 30, 2020, from HK$104.1 million a year ago.

This came as the electronics manufacturing service provider's revenue fell 19.9 per cent, led by a 35.8 per cent decline in consumer electronics revenue.

Earnings per share stood at 21 Hong Kong (HK) cents for the half year, down from 24 cents a year ago, according to a bourse filing.

Revenue for the first half fell 19.9 per cent to HK$1.09 billion, from HK$1.37 billion a year ago, mainly due to a decrease in demand amid the Covid-19 pandemic.

Consumer electronics revenue stood at HK$365.1 million, down 35.8 per cent from HK$568.7 million. Meanwhile, industrial and commercial electronics revenue dropped 8.6 per cent to HK$729.8 million, from HK$798.4 million a year ago.

The company has declared an interim dividend of five HK cents per share for the half-year period, down from six cents a year ago. The dividend will be paid on Dec 8, after books closure on Nov 24.

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Valuetronics chairman and managing director Ricky Tse Chong Hing said: "Our H1 FY2021 results reflect the impact of the Covid-19 pandemic and the resultant slowdown in demand from certain customers, and there is still no end in sight given the new waves of infection in several countries."

Furthermore, the Sino-US trade tensions have caused certain customers to transfer their production for the US end-market from Valuetronics to other suppliers in North America and Asean. The group will see the negative impact of this in its next financial year, he said.

Barring unforeseen circumstances, the group expects to remain profitable for FY2021. However, the pandemic and Sino-US trade tensions continue to make the outlook for the near term beyond FY2021 highly uncertain, it said.

Shares of Valuetronics closed at 58 Singapore cents on Tuesday, down 1.5 cents or 2.5 per cent.