Semiconductor distributor Serial System has reported a 1% dip in revenue to US$221.8 million for its 1QFY2022 ended March, due to a shortage prevalent across the industry.
While revenue growth was crimped, the company was able to eke out better gross margins of 8.6 points, up from 7.7 points from 1QFY2021.
However, during the quarter, the company booked an allowance of US$1.2 million on obsolete stocks. It had to bear with higher financing costs and adjust for lower fair value loss on its equity investments.
As such, earnings for 1QFY2022 was just US$622,000, down 77% y-o-y from the year earlier quarter’s US$2.7 million. Earnings for 1QFY2021 partially lifted by a writeback of US$1.1 million as well.
CEO Derek Goh says the company has remained resilient despite the challenging operating environment. The company sees a cyclical pickup in manufacturing for the current 2Q and coming 3QFY2022.
“While we still face headwinds on several fronts, we continue to remain optimistic on the demand for chips, and we will continue to enhance our value proposition as a reliable distributor with a lean cost structure,” he adds.
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Serial System last traded at 12 cents.
