SINGAPORE (Nov 27): Jubilee Industries posted 1H19 earnings of $2.57 million, more than triple that of $0.81 million in 1H18, mainly due to higher revenue and higher currency translation differences.
Revenue for the half year ended September came in at $88.4 million, 1.1% higher than $87.5 million in the previous year, mainly due to higher contribution from the group’s Mechanical Business Unit (MBU), but was partially offset by lower contribution from its Electronic Business Unit (EBU).
As cost of sales dropped 1.1% y-o-y to $81.0 million, gross profit for 1H19 came in at $7.42 million, 32.9% higher than $5.58 million a year ago.
During the period, the group registered $1.04 million in profit from currency translation differences, compared to a loss of $0.25 million last year.
Following the results announcement, CGS-CIMB Securities is reiterating its “add” call on Jubilee Industries with a target price of 51 cents.
EBITDA margin was higher in 1H19 at 3.6%, compared to 1.7% in 1H18, largely contributed by Samsung and Hynix, the top two product lines of the group’s EBU segment. The two product lines generated about $4.7 million in gross profit.
The uplift in margin was also attributable to leaner manufacturing process with tighter controls on direct overheads and selection of higher-margin products.
On the outlook, the group’s management remains upbeat for both the electronics manufacturing industry and global injection moulded plastics market. The global electronic components market is transitioning towards fully autonomous transport and smart cities, which should support the demand for memory products.
In a Nov 19 report, analyst Colin Tan says, “We retain our ‘add’ call as Jubilee remains on track for strong growth recovery in FY19.”
As at 11.13am, shares in Jubilee Industries are trading at 3.3 cents or 0.88 times FY19 book.
