Valuetronics has reported earnings of HK$82.1 million ($14.3 million) for the 1HFY2024 ended Sept 30, 42% higher y-o-y.
Earnings per share (EPS) for the period stood at 19.8 HK cents on a fully diluted basis.
Revenue for the period fell by 15.2% y-o-y to HK$891.3 million although gross profit rose by 5.8% y-o-y to HK$138.9 million on the back of higher gross profit margins. For the 1HFY2024, gross profit margin (GPM) rose by 3.1 percentage points y-o-y to 15.6%.
The decline in revenue was due to a broadbased drop in Valuetronics BN2 ’ segments, consumer electronics (CE) and industrial & commercial electronics (ICE). CE revenue fell by 4.6% y-o-y to HK$234.7 million due to the softening demand in end markets while ICE revenue fell by 18.5% y-o-y to HK$656.6 million from a decrease in demand from some ICE customers.
GPM rose from the more stable material costs stemming from the relief of component shortage issues. Direct labour costs in China also normalised due to a more stable labour supply and the depreciation of the renminbi (RMB).
Other income rose by 123.0% y-o-y to HK$28.8 million mainly due to the higher interest rates, which boosted interest income.
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The board has declared an interim dividend of 4 HK cents per share as well as a special interim dividend of 4 HK cents, which is from its improved interest income. Both dividends are payable on Dec 1.
As at Sept 30, cash and cash equivalents stood at HK$1.14 billion.
“Despite the challenging macro environment, we have managed to onboard customers in new and various sectors who will help to further diversify our revenue. We will continue to leverage our Vietnam and China campuses to provide diversified manufacturing solutions and seize opportunities to acquire new customers,” says Ricky Tse Chong Hing, chairman and managing director of Valuetronics.
Looking ahead, the group says it expects to remain profitable in the FY2024 amid the current macroeconomic challenges. It adds that it intends to continue with its share buyback programme. Since its share buyback programme was announced on Feb 28, 2022, the group has spent HK$68 million buying a total of 22 million shares.
Shares in Valuetronics closed flat at 54 cents on Nov 8.
