SINGAPORE (Apr 23): Sunningdale Tech reported a 74.8% fall in earnings to $1.9 million for the 1Q18 ended March, from $7.7 million in 1Q17 a year ago.
1Q18 revenue slipped 1.6% to $169.0 million, from $171.8 million a year ago.
Revenue from Sunningdale’s consumer/IT segment fell 12.2% to $57.8 million, mainly due to a decline in demand from end customers for certain projects, project end-of-life, and new projects which have yet to commence the ramp-up phase.
The decline in the consumer/IT segment was also due to the advancing of orders in this segment during FY17, which resulted in higher than expected revenue for 1Q17.
The group says the lower revenue was also due to the weakening of the US dollar against the Chinese renminbi, Malaysian ringgit and Singapore dollar, partially offset by the strengthening of the euro against these currencies.
Gross profit declined 17.2% to $21.4 million, as gross profit margin fell 2.3 percentage points to 12.7% for 1Q18. This was mainly due to the low utilisation levels as a result of lower orders for the consumer/IT segment.
Other expenses jumped 82.7% to $5.9 million, from $3.2 million a year ago, mainly due to foreign exchange loss of $5.2 million for 1Q18, compared to foreign exchange loss of $$2.1 million a year ago.
As at end March, cash and cash equivalents stood at $103.3 million.
Looking ahead, Sunningdale says it continues to face business headwinds in the form of volatile foreign exchange markets and rising labour costs across its operations.
The group says it will focused on boosting productivity and enhancing operational efficiency in order to improve profit margins, as well as reinvest into technology and new machinery to stay ahead of the curve in an ever-changing business environment.
Shares of Sunningdale Tech closed 1 cent higher at $1.73 on Monday.
