SINGAPORE (July 10): Cheung Woh Technologies reported a loss of $1.5 million for the 1Q18 ended May compared to earnings of $3.2 million a year ago due to lower sales and higher costs incurred.
The manufacturer and supplier of precision HDD components reported turnover of $16.6 million in 1Q18, a decrease of 21.2% compared to $21 million a year ago.
Cost of sales decreased by 6.5% or $1.1 million compared to 1Q17. Cheung Woh says the decrease was not in line with decrease in turnover due to higher materials, labour and overhead costs incurred in 1Q18. As a result, gross profit margin dropped compared to 1Q17.
The lower turnover was due to a drop in customers’ demand for air-combs and VCM (Voice Coil Motor) plates and the transition of phasing in the manufacturing of baseplates, resulting in a decrease of 27.8% as compared to 1Q17.
Turnover in Precision Metal Stamping components segment, on the other hand, increased by 13.5% compared to 1Q17 due to higher sales to a new customer.
Other operating income in 1Q18 was 25.3% lower mainly due to lower sales of scrap metal of $222,000 and lower rental income of $126,000 generated.
Shares in Cheung Woh closed at 21 cents on Monday.
