Vicplas full-year earnings grow 17.7% on boost from medical devices

NET profit for Vicplas International, which makes medical devices and pipes, increased by 17.7 per cent to nearly S$5 million for its fiscal year ended July 31, from S$4.2 million a year ago.

Earnings per share stood at 0.98 Singapore cent, up from 0.84 cent for the previous financial year, the mainboard-listed firm said in results released on Monday.

Revenue rose 10.8 per cent on the year to S$88.8 million, from S$80.2 million previously.

The overall top-line growth was driven by the 36.2 per cent increase in revenue from the medical devices segment due to increased orders from customers. The segment makes products such as medical disposables, diagnostic devices, drug delivery systems and feeding catheters.

Over the longer term, the medical devices arm will continue to face uncertainties in international trading conditions as a result of the US-China trade tensions and the Covid-19 outbreak, said Vicplas.

The group may establish or acquire a fifth plant outside China for manufacturing medical devices to diversify and attract potential customers, although these plans are at an early stage, said Vicplas on Monday.

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Meanwhile, the pipes and pipe fittings segment saw revenue fall 21.7 per cent during the year ended July 31 as a result of the four-month stoppage of most construction projects in Singapore as part of the government's measures to contain the spread of Covid-19.

There was also a slow recovery after, as the construction industry adjusted to new work arrangements with enhanced safety measures, Vicplas noted.

The pipes and pipe fittings segment's revenue for H1 FY21 is expected to be lower than in H1 FY20 (which was not affected by the coronavirus pandemic). However, its revenue will likely be higher for H2 FY21 compared with H2 FY20, amid gradual recovery in the construction industry, Vicplas added.

A final dividend of 0.375 Singapore cent per share was proposed for FY20. If it is approved by shareholders at the Nov 26, 2020 annual general meeting, books closure will take place on Jan 6, 2021, and the dividend will be paid on Jan 15, 2021.

For FY19, Vicplas had declared a final dividend of 0.5 cent per share and a special dividend of 0.25 cent per share.

Shares of Vicplas rose 0.5 Singapore cent or 1.1 per cent to close at 45 cents on Friday.