SINGAPORE (Feb 28): Precision metal components manufacturer InnoTek announced earnings of $2.8 million for 4Q17, down 42% from $4.8 million in the same period a year ago on unrealised exchange losses and higher tax expense.
Revenue for the quarter grew 1.3% to $56.1 million from $55.4 million previously due to higher sales booked from the Precision Machining segment, namely for heat sink, car display panel and TV Bezel programmes.
In particular, InnoTek highlights healthy growth seen in its TV segment as the higher-quality finish and general shift towards larger format High Definition TV panels continue to benefit the group.
It also adds that the TV segment has overtaken the Office Automation division as InnoTek’s main revenue contributor for the first time, accounting for 39% of revenue in 4Q17.
Over the period under review, lower foreign currency translation of $1 million was recorded compared to $1.5 million a year ago.
Tax expense grew by 76.4% to $2.5 million from $1.4 million previously, which is mainly attributed to a subsidiary which has fully utilised its carried-forward losses in 12M17 where losses were carried forward from 12M16. Also included was a $1.4 million reversal of deferred tax assets.
For FY17, InnoTek’s earnings fell 15% to $9.8 million from $11.6 million a year ago, also due to higher tax expenses and exchange losses.
The group has proposed a full-year dividend of 1 cent for FY17, double than that of FY16.
InnoTek says it remains optimistic about its prospects in the automotive sector, which it intends to develop as one of its core businesses, as sales for its received orders are approaching end-of-life while newer ones will commence mass production in 2H18.
The group intends to pursue more automotive programmes such as production of interior parts as well as functional and safety parts, while working closely with global suppliers to develop this sector as main revenue contributor.
“The group will improve operational and cost efficiencies by focusing on technological innovation such as manufacturing automation, which will enable us to tackle challenges such as wage inflation and higher operating costs. We will strive to secure more clients even as we strengthen manufacturing activities in Thailand and Weihai,” states InnoTek CEO, Lou Yiliang.
Shares in InnoTek closed flat at 46 cents on Wednesday.
