SINGAPORE (May 11): Elec & Eltek reported 1Q18 earnings fell 18.9% to US$7.23 million ($9.69 million) from US$8.91 million in 1Q17.
Revenue for the quarter was 13.5% higher at US$131.9 million from US$116.2 million a year ago.
The group’s orders maintained steady growth while intensive industry competition exerted pressure on the price of the company’s product, which coupled with the impact of Renminbi appreciation has further increased production costs.
Cost of sales increased 17.8% y-o-y to US$115.6 million, bringing gross profit for 1Q18 to US$16.3 million, 9.9% lower than US$18.1 million last year.
Distribution and selling costs dropped 7.6% to US$2.44 million from US$2.64 million in 1Q17.
Administrative expenses increased by 7.7% to US$4.99 million, compared to US$4.63 million in the previous year.
As at March 31, the group’s cash and cash equivalents stood at US$27.2 million.
On the outlook, the printed circuit board (PCB) market remains challenging and competitive in 2018, and the group is well prepared for the challenging and competitive environment.
It is currently upgrading its PCB production equipment, aiming to further optimise product performance to continue enhancing its competitiveness, as well as remain focused on quality control and cost control of production.
In addition, the group is also expanding its capacity in its laminate business so as to capture the business opportunities in the laminate market.
Shares in Elec & Eltek closed at US$1.55 on Friday.
