Memtech's 3Q earnings up 26.5% to $5.3 mil

The group’s automotive segment saw a 17.3% y-o-y increase to US$20.3 million, while the industrial and medical segment grew 11.8% y-o-y to US$3.01 million.

Meanwhile, the group’s telecommunication segment dropped 24.9% to US$5.78 million, while consumer electrics segment fell 8.8% to US$17.1 million.

Concurrently, cost of sales was down by 1.3% to US$37.7 million compared to US$38.2 million a year ago.

Hence, gross profit for the third quarter ended September came in at US$8.49 million, 3.1% more than US$8.24 million in the same period last year, due mainly to a shift in product mix towards higher margin products and improved operational efficiency through automation.

Correspondingly, gross profit margin increased to 18.4% from 17.7% a year ago.

Other operating income increased 87.8% to US$0.95 million compared to US$0.51 million last year, as the group received more government incentives and subsidies for its use of innovative manufacturing technologies.

Other operating expenses dropped more than double to US$48,000 from US$113,000 the previous year.

Sales and marketing expenses declined 19.0% to US$2.0 million from US$2.49 million, due mainly to the implementation of cost containment measures and lower freight costs.

General and administration expenses increased 4.0% to US$2.9 million from US$2.79 million, due mainly to higher staff costs.

In 3Q17, the group recorded a loss in exchange of US$158,000 compared to a gain of US$11,000 a year ago.

Looking forward, the group is concentrating its efforts on the production of higher margin, complex engineering products by leveraging on its niche capabilities to secure new contract wins.

Similarly, the group has gradually eliminated the production of lower margin products which were previously outsourced.

Barring any unforeseen circumstances, the group remains cautiously optimistic of its performance for FY17.

Shares in Memtech closed 7 cents lower at $1.06.