Precision plastic component manufacturer Sunningdale Tech reported earnings of $8.3 million for 1H20 ended June, from the losses of $292,000 the year before.
This brings earnings per share (EPS) to 4.30 cents for the half-year from the loss per share of 0.15 cents a year ago.
The mainboard-listed company reported 54.1% y-o-y in core net profit to $1.9 million.
Revenue, on the other hand, declined 14.7% y-o-y to $275.1 million due to the disruptions caused by Covid-19.
Revenue from the automotive segment fell 29.4% y-o-y to $84.2 million primarily due to the mandatory government closures of its manufacturing facilities, on top of a slowdown across US and Europe markets.
Revenue from its consumer/IT segment declined 12% y-o-y to $105.6 million, mainly due to a “deliberate decision” to exit the lower-margin business of a particular customer in February 2019, as well as the impact of the Covid-19 shutdowns.
Sunningdale Tech’s healthcare segment rose 17.9% y-o-y to $34.5 million due to an increase in secured orders and new projects launched.
Gross profit for the half-year came in at a marginal 2.1% y-o-y to $33.5 million, while gross profit margin improved 2.0 percentage points to 12.2% for the same period. This improvement was driven by a few things including the waiver of foreign worker levy in Singapore.
The rise in gross profit was also improved by the completion of relocation of the Group’s parts operations from one plant in Shanghai to Chuzhou, changes in product mix, tightened cost controls, improvement in operational efficiency and the reduction and exemption of social security contributions required by the Human Resource Social Security Bureau in China.
Without the reduction and exemption on social security contribution and waiver of foreign worker levy, the gross profit margin would be 11.4%.
The board has declared an interim dividend of 1.8 Singapore cents per share for the 1H20, down from the 3.0 Singapore cents in 1H19.
“Looking ahead, our immediate attitude for the second half is one of caution and heightened vigilance as we are unable to predict if lock ups and shut downs will recur, nor are we able to quantify the economic impact on end demand of our customers,” says group CEO and executive director Khoo Boo Hor.
“However, we will continue to focus on what we can control internally. This includes tightening our cost controls, boosting productivity and implementing overall operational excellence across our various business segments and manufacturing facilities. We will also continue to monitor market conditions closely while aggressively pursuing business development initiatives to secure new projects,” Khoo adds.
Shares in Sunningdale Tech closed flat at $1.20 on August 6.
