SINGAPORE (May 4): Hi-P International, the consumer electronics manufacturer, has announced $8.4 million in earnings for the 1Q ended March on a surge in gross profit, reversing from the $12.4 million loss recorded a year ago.
Revenue for the quarter fell 11.4% to $244.2 million from $275.6 million a year ago, as assembly products with fewer component content were sold over the quarter compared to the previous year.
Despite the lower revenue, gross profit doubled to $33.4 million from $16.7 million, boosting gross profit margin to 13.7% from 6.1% in 1Q16.
Hi-P attributes to better product mix with lower sales of high component content assembly products; improved operational efficiency and cost management; as well as lower inventory provision and scrap expenses.
Other income decreased by 21.9% on-year to $1.3 million as a result of less government incentive as compared to 1Q16.
Other expenses also fell 54.8% to $3.6 million, mainly due to lower net loss arising from net foreign exchange differences and fair value loss on hedging contracts.
Noting “tremendous improvements” to overall operational efficiency over the quarter, Yao Hsiao Tung, Hi-P International executive chairman and CEO, says the group remains well-positioend to capture growth opportunities going forward.
“The strengthening of our balance sheet can be attributed to our profitability, cash cycle improvements and controlled capital expenditure… Furthermore, projects that are now in their initial stages will be ramped up in the second half of the year. Coupled with our effective cost controls and enhancements to operational efficiency, we expect to achieve a higher profit for FY2017 as compared to FY2016,” says Yao.
Shares of Hi-P International closed 4.93% higher at 74 cents on Thursday.
