SINGAPORE (Feb 8): GP Industries, the electronics manufacturer, saw its 3Q18 earnings double to $17.7 million from $8.2 million in the same period a year ago on higher other operating income and lower distribution costs.
This brings the group’s 9M earnings for the period ended Dec 2017 to $30.2 million, up 50.6% from $20.1 million during 9M17.
Revenue for 9M18 grew 8.1% to $837.2 million from $774.4 million previously due to growth from the Battery Business, which was previously known as GP Batteries International before it was fully acquired by GP Industries over 3Q, as well as higher revenue from the Electronics and Acoustics Business.
However, gross profit only grew 3.5% to $200.2 million over the 9M period due to higher costs, mainly due to the appreciation of the RMB as well as increased metal and component prices.
Distribution costs decreased by 5%, as the group selectively slowed down some of its investments in brand building activities for the Battery Business.
It also saw a $3.6 million decrease in doubtful debt provision reported by the Battery Business due to continuous improvements in the payment performance and ageing profile from its distribution network in China.
Operating expenses grew 31.2% to $5 million compared to $3.8 million a year ago, after including approximately $1.6 million of transactional costs related to the delisting of GP Batteries from the SGX with effect from Dec 2017.
While GP Industries anticipates favourable or steady consumer demand for its products in the US, China and Europe, the group expects continued RMB appreciation and increases in the price of certain metals & components to affect its profit margin for some of its businesses moving forward.
As such, the group says it will continue to enhance the competitiveness of its businesses by investing in technology, new product development, and further automating its factories while continuing ot build its brands and distribution in key markets.
Shares in GP Industries closed flat at 72 cents on Thursday.
