SINGAPORE (Feb 27): Sunningdale Tech, the manufacturer of precision plastic components, reported a 63.3% rise in 4Q earnings to $21.5 million from $13.2 million a year ago.
The group has recommended a final dividend of 6 cents, representing a dividend yield of 5.5%.
Revenue for the quarter grew 3.4% to $184.1 million in 4Q16 from $178.1 million in the previous year, buoyed by contributions from the automotive and consumer/IT business segments which were partially offset by a decline in revenue from the group’s healthcare and mould fabrication segments.
As such, the group’s gross profit increased by 6% on-year to $25.1 million for 4Q16.
Other income grew more than tenfold to $15.8 million as compared to $1.3 million in 4Q15, due to a foreign exchange (forex) gain of $8.4 million and a gain on the disposal of property, plant and equipment of $5.1 million for 4Q16 compared to a forex loss of $45,000 for 4Q15.
Other expenses, however, nearly doubled to $2.7 million from $1.4 million in the previous year on the back of retrenchment costs amounting $1.9 million, which was a result of a restructuring exercise in the Southern China plant as well as the relocation of an operating unit from the group's Shanghai plant to its Chuzhou plant.
The group recorded an income tax gain of $2.3 million as compared to expenses of $3.6 million a year ago, mainly due to a tax refund of $5.9 million for 4Q15 recorded in a subsidiary when the appeal was finalised.
Excluding acquisition costs, foreign exchange gains, gains on the disposal of property, plant and equipment, retrenchment costs and the tax refund, earnings would have been $9.8 million for 4Q16 and $7.5 million for 4Q15, representing a 31.7% y-o-y increase.
For FY16, Sunningdale Tech saw a 7.2% decline in full year earnings to $39 million as compared to earnings of $42.1 million in FY15, although revenue grew 1.5% to $684.5 million for the financial year.
The overall decline in full year earnings was largely due to the one-off retrenchment and relocation costs incurred during 4Q. Excluding the impact from these factors would have resulted a 34.1% increase in the group’s core net profit to $31.7 million for FY16.
“During the year, we adopted a proactive approach to driving operational efficiency and improving the utilisation of our manufacturing sites by restructuring our operations. With a leaner organisation, this has also ensured the gradual improvement of our operating margins in spite of rising labour and input costs across our global footprint. In addition, we will continue to drive productivity and intensify business development efforts in order to further diversify our customer base and increase our product offering,” comments Khoo Boo Hor, CEO and executive director of the group.
Shares of Sunningdale Tech closed flat at $1.32 on Friday.
