SINGAPORE (May 9): Frencken Group, the high-tech capital and consumer equipment service provider, reported earnings of $8.6 million for the 1Q ended March, growing 27.2% from $6.8 million on higher revenue.
Revenue for the quarter grew 14.7% on-year to $159.1 million mainly due to a growth in contributions from the Mechatronics division due to higher sales mainly from the industrial automation segment, due to increased orders from a key customer in Europe.
The higher Mechatronics revenue growth more than offset a marginal sales decline from the integrated manufacturing services (IMS) division, where revenue contribution fell from the consumer & industrial electronics and tooling segments.
As a result of the higher group revenue, gross profit grew 8.7% to $25.1 million from $23.1 million a year ago.
Gross profit margin however fell to 15.8% from 16.7% previously, which the group says is mainly due to a shift in revenue contributions from its diverse business segments.
Selling & distribution expenses fell 1.4% to $3 million while administrative & general expenses were 8.9% lower at $10.8 million compared to a year ago due to lower staff salaries and related costs.
As at end March, cash and cash equivalents were $69.8 million, up from $67.1 million a year ago.
Although it expects the macroeconomic backdrop to remain challenging due to trade-related uncertainties and a cyclical downturn in the semiconductor industry, Frencken says it will continue to operate in a broad array of business segments, end-user markets and geographical regions as it believes this business diversity will provide greater resilience and stability to the group.
Shares in Frencken closed flat at 62 cents on Thursday.
