SINGAPORE (Aug 10): Far East Group, the refrigeration and air-conditioning business, announced half-year earnings of $0.25 million compared to its loss of $0.71 million a year ago on higher gross profit margin and higher other operating income.
Revenue for the half-year grew 0.8% to $17.2 million from $17.1 million a year ago due to an increase in sales from the group’s Malaysia, Indonesia and Myanmar markets. This was however partially offset by lower sales in Singapore and Hong Kong.
Notably, revenue from the commercial and light industrial (refrigeration) segment grew by $0.7 million in 1H17 from the previous year, while the resident & commercial (air-conditioning) segment as well as the oil, marine and gas (refrigeration & air conditioning) segments both reported a decrease in revenue.
The group’s gross profit margin increased by 4.3 percentage points to 30.9% in 1H, mainly due to the write-back of stocks provision in 1H17.
Other operating income grew by $0.7 million as well, mainly due to dividend income from unquoted investments, as well as a government grant and the increase in rental income over the half-year.
In its outlook, Far East Group notes that the heating, ventilation, air-conditioning and refrigeration (HVAC&R) industry remains competitive as its efforts to improve efficiencies are on-going.
The group is in the process of consolidating its heat-exchanger manufacturing facilities to China, an effort which was initiated in FY16, and the consolidation is expected to complete by end-FY17.
Far East Group says it will continue to focus on its strategy to enhance its regional presence in the markets it currently operates in, and that its directors are of the view that the group is moving in the right direction to enhance its distribution network.
Shares of Far East Group closed 1.3% lower at 7.8 cents on Thursday.
