Mainboard-listed Sunningdale Tech reported earnings or net profit attributable to shareholders of $10.4 million for the 3QFY2020 ended Sept 30, up 86.5% from the $5.6 million reported a year ago.
The higher earnings for the quarter translates into earnings per share (EPS) of 5.41 cents, up 85.2% from the EPS of 2.92 cents for the 3QFY2019.
3QFY2020 revenue fell 1.8% y-o-y to $180.6 million mainly due to a decrease in revenue from the automotive segment, which fell 7.0% y-o-y to $59.6 million.
The lower revenue for the segment was attributable to the full and partial lockdowns implemented by the Indian government, coupled with lower demand from customers due to Covid-19 disruptions and end-of-life for certain projects.
Gross profit for the quarter saw a 16.8% growth y-o-y to $26.8 million due to the completion of the relocation of the group’s parts operations to Chuzhou from Shanghai, changes in the product mix, tighter cost controls, the waiver of the foreign worker levy in Singapore, as well as the exception of social security contributions in China.
Accordingly, gross profit margin (GPM) grew 2.3 percentage points to 14.8% for the same period.
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After taking into account adjustments for net foreign exchange gains/losses, retrenchment costs, rent paid at its vacant premises in Shanghai and Thailand, allowance for impairment on property, plant and equipment (PPE), net gains/losses on disposal of PPE, government grants due to Covid-19 and reduction and exemption on social security contribution and foreign worker levy (FWL), core net profit for the 3QFY2020 was up 57.3% y-o-y at $8.8 million.
The group says it has continued to “generate strong positive operating cash flows amounting to $52.9 million for 9MFY2020”.
On Nov 7, Sunningdale Tech’s wholly-owned subsidiary Sunningdale Tech Inc (STI) acquired Moldworx, a US-based plastics company for a purchase consideration for US$4.0 million ($5.4 million).
The payment, which includes the purchase consideration, the incremental tax liability payment of US$93,060 and closing cash of US$136,178.47 was paid in full in cash, and was funded by the company’s internal resources.
“In line with the Group’s strategic intent to accelerate growth for its healthcare business segment, the acquisition of US-based Moldworx will allow the Group to capitalise on the large number of healthcare original equipment manufacturers and large market size in the US,” it says.
“While our fastest growing Healthcare segment experienced flat growth due to some project delays by customers, lower end-demand for non-essential surgical procedures during the COVID-19 period and worldwide material shortages, we continued to receive new enquiries for COVID-19 related projects. Furthermore, our Automotive and Consumer/IT segments have shown gradual signs of recovery,” says group CEO and executive director Khoo Boo Hor.
“We are also pleased to have completed the acquisition of US-based plastics manufacturer Moldworx, LLC. The acquisition is in line with our forward-looking plans to accelerate growth for our Healthcare segment as it will allow us to capture new business opportunities in the large US market.”
“Looking ahead, we will remain vigilant as we are unable to predict if lock-ups and shutdowns will recur, nor are we able to quantify the economic impact on end-demand of our customers. Internally, we will continue to focus on what we can control. This includes tightening our cost controls, boosting productivity and implementing overall operational excellence across our various business segments and manufacturing facilities,” he adds.
Shares in Sunningdale Tech closed 10 cents higher or 6.3% up at $1.68 on Nov 9.
