Valuetronics posts 10.3% rise in Q3 profit

Singapore

VALUETRONICS - a mainboard-listed design and manufacturing partner for brands in the consumer electronics (CE) and industrial and commercial electronics (ICE) sectors - on Tuesday posted a 10.3 per cent increase in net profit to HK$39.2 million (S$6.85 million) for the third quarter ended Dec 31, 2014, up from HK$35.5 million a year ago.

Revenue rose 3.4 per cent year on year to HK$596.2 million, driven mainly by revenue from its ICE sector, which rose by 23.0 per cent to HK$235.0 million on a rise in demand from some of its ICE customers and contribution from a new ICE customer, said the company.

Its CE revenue, however, fell by some 6.4 per cent from HK$385.7 million a year ago to HK$361.2 million, due to the slowdown in demand from its CE customers in the LED lighting business, according to Valuetronics.

Said Ricky Tse, chairman and managing director of Valuetronics: "The aggressive pricing strategies of LED lighting customers introducing lower-priced products will continue to have an effect on our CE segment and such challenges are part and parcel of our business.

"As we continue to manage our reliance on the CE segment, we are benefiting from the strong growth from our ICE customers and will continue our efforts to build up this segment."

Selling and distribution costs for the quarter rose marginally by 1.2 per cent to HK$8.6 million, while administrative expenses grew 9.8 per cent to HK$35.3 million, due to the increase in PRC staff costs.

Earnings per share for the nine months ended Dec 31, 2014, fell from 29.9 HK cents a year ago to 29.4 HK cents.

No dividends have been declared by the company.

"Group-wide, we will continue to remain vigilant in monitoring market developments, continuing our efforts in improving our fundamentals, which include our design and development capabilities, production efficiencies and inventory management," said Valuetronics.

As at Dec 31, 2014, the group had net current assets of HK$568.0 million, total assets of HK$1.58 billion and shareholders' funds of HK$769.9 million, it said.

Its working capital as at Dec 31, 2014, stood at HK$412.7 million.

On Tuesday, Valuetronics' shares closed two Singapore cents higher at S$0.405.