Acer-backed Winking Studios, which provides art outsourcing and game development services for the video game industry, has posted a 15.5 per cent drop in net profit for the six months ended Dec 31, 2023 to US$453,000.

In the corresponding period of the previous year, the group recorded a net profit of US$536,000.

The company, which debuted on Singapore’s Catalist board in November last year, posted revenue of US$15.1 million in H2 FY23, up 15 per cent from the year-ago period.

Cost of sales rose 10.8 per cent to US$10.2 million. Distribution and marketing expenses increased by 44.3 per cent to US$941,000. This was mainly due to the company’s more aggressive marketing and distribution activities aimed at expanding market share and sales volume. The moves included adding more sales personnel and promotional activities aimed at venturing into markets such as Europe, America and Asia.

Administrative expenses increased by 37.7 per cent to US$3.9 million. This was largely due to the various initial public offering (IPO) related expenses incurred during the company’s listing in Singapore.

For the full year, the group posted a 71.6 per cent increase in net profit to US$1.8 million, with a 19.5 per cent expansion in revenue to US$29.3 million.

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The group has proposed a special cash dividend of 0.5 Singapore cent per share for FY23.

Winking Studios said in a filing on the Singapore Exchange on Saturday (Feb 24) that in line with its strategic focus on geographic diversification and expanding revenue streams, it achieved significant performance recovery in 2023. This was fuelled by securing new contracts and expanding its client base in the United States and South Korea. “Notably, the US contributed 16.8 per cent of total revenue in FY2023, a marked increase from 9.7 per cent in FY2022,” it added.

Johnny Jan, Winking Studios’ executive chairman and chief executive officer, said: “With our established reputation, cutting-edge capabilities, and close partnership with long-standing customers, and funds from our recent IPO to finance our growth plans, I believe we are well positioned to further expand our market share both regionally and globally.

“We are actively exploring potential strategic acquisitions and continuous investments in technology, particularly in artificial intelligence technology to further strengthen our competitive edge.”

Winking Studios closed unchanged at S$0.215 last Friday.