Fu Yu Corporation reported 2HFY2020 earnings of $9.5 million, 24.7% higher than earnings of $7.6 million a year ago.
For the FY2020, the manufacturer of precision plastic parts saw 33.3% higher earnings of $16.9 million from $12.7 million.
2HFY2020 earnings per share (EPS) for the period ended Dec 31, 2020, stood 24.7% higher at 1.27 cents, while EPS for FY2020 grew 33.3% y-o-y to 2.25 cents.
Revenue for the 2HFY2020, however, fell 15.9% y-o-y to $81.9 million due to lower sales from the group’s manufacturing operations in China and Malaysia, offset by higher sales from the Singapore segment. Compared to the preceding half-year period, revenue was higher than the $71.6 million posted in 1HFY2020.
Revenue for the FY2020 fell 21% y-o-y to $153.4 million due to lower sales in China and Malaysia mainly. This was attributed to business disruptions as a result of government measures put in place to deal with the Covid-19 situation. The lower sales were mitigated by higher contributions from Singapore due to higher sales of consumer and medical products.
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Gross profit for the 2HFY2020 grew 5.9% y-o-y to $21.5 million. Accordingly, gross profit margin (GPM) expanded to 26.3% from 20.9% previously.
During the period, the group recognised a one-time expense of $0.8 million under cost of sales in relation to the closure of its factory in Chongqing, China. Fu Yu Chongqing ceased business activities in 4QFY2020.
In comparison, Fu Yu saw a one-time expense of $4.2 million in 2HFY2019 due to the cessation of its factory operations in Shanghai, China.
Excluding these one-time expenses, the group would still have registered a higher GPM of 27.3% in 2HFY2020 versus 25.2% in 2HFY2019.
Gross profit fell 3.7% y-o-y to $36.8 million for the FY2020, with GPM of 24.0% from 19.7% previously. Excluding the one-time expenses in Chongqing and Shanghai, GPM would have stood at 24.5%.
This increase was attributed mainly to the change in revenue mix, a reduction in headcount as well as the group’s ongoing initiatives to improve cost management and raise operational efficiencies.
Other income grew 16.1% y-o-y to $4.3 million for 2HFY2020, and up 22.4% y-o-y to $8.7 million for the FY2020.
The increase was due to gain on disposal of property, plant and equipment, and receipt of grants under government schemes to support businesses during Covid-19.
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The board has declared a final dividend of 1.25 cents per share in 2HFY2020 bringing the total payout to 1.6 cents in FY2020. This translates to a dividend payout of some 71.1% based on FY2020’s net profit.
As at end-December, cash and cash equivalents stood at $106.5 million.
“The group was still able to deliver a commendable bottom line performance in FY2020 amid challenging operating conditions caused by the Covid-19 pandemic. Although group revenue was softer, we are encouraged by our Singapore operations which displayed a resilient performance with stable revenue and higher segment profit,” says CEO Elson Hew.
“Looking ahead, the group foresees business headwinds to continue during FY2021 due to uncertainties surrounding the Covid-19 pandemic and its impact on global demand, as well as ongoing political tensions. The group’s financial performance is also influenced by other factors such as intensifying industry competition, pressure on selling prices and movements in the US Dollar,” he adds.
“To ensure business resilience and stability in the current challenging business environment, we will continue to optimise our operations, maintain a diversified customer base and product portfolio, and sustain a sound financial position.”
Shares in Fu Yu closed 0.5 cent lower or 1.8% down at 28 cents on Feb 23.
