Frencken Group has reported earnings of $11 million for its 3QFY2022 ended Sept, down 25.7% from the year earlier period.
Part of the drop was due to a one-off inventory write down of $2.4 million by its US subsidiary, without which, it would report earnings of $13 million.
Revenue in the same period was $195.3 million, versus $196.5 million in the year earlier. The company suffered from unfavourable currency movements with the Euro losing ground versus Singdollar, the reporting currency.
Assuming a constant exchange rate, Frencken would have reported revenue of $205.1 million instead.
For 9MFY2022, the company reported earnings of $37.1 million, down 19.5% y-o-y. Revenue, meanwhile, was up 2.2% to $584.3 million.
In its business update, executive director Dennis Au says that the company continues to face cost pressures especially in Europe, which it tries to deal with by renegotiate cost sharing arrangements with customers there.
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He warns that it continues to face headwinds from geopolitical tensions, supply constraints, cost inflation and rising interest rates.
“In the face of heightened economic and market uncertainty, the group believes that its highly diverse exposure to multiple market segments and customers in the high technology industry will continue to provide resilience,” says Au.
From its visibility thus far, Frencken expects overall revenue for the current 2HFH2022 to “remain stable” versus 1HFY2022, he adds.
Frencken shares traded as low as $1.09, down 8.4%, before closing the day at $1.11, a drop of 6.72%. Year to date, the stock is down 43.08%.
