Vicplas International has reported earnings of $5.02 million for the 1HFY2022 ended January, 0.6% higher than earnings of $4.99 million in the corresponding period a year ago.
The earnings growth was attributable to a growth in the half-year revenue and offset by the higher costs in energy and raw material, as well as the absence of Covid-19 grants from the government.
This translates to earnings per share (EPS) of 0.97 cent, up from the previous half-year period’s 0.96 cent on a fully diluted basis.
Revenue for the 1HFY2022 grew 11.9% y-o-y to $63.2 million due to higher revenue from both Vicplas’ medical devices as well as its pipes and pipe fittings segments.
Revenue for medical devices grew 11.0% y-o-y to $45 million due to higher customer orders, while revenue from the pipes and pipe fittings segment grew 14.1% y-o-y to $18.3 million from a gradual recovery in Singapore’s construction industry on the back of the easing Covid-19 disruptions.
Other income during the half-year period fell 4.0% y-o-y to $2.7 million as there were no Covid-19 related government subsidies.
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In the 1HFY2022, raw materials and consumables used increased by 18.3% y-o-y to $31.0 million, mainly due to the higher cost of raw materials.
Employee benefits expense for the half-year period rose by 15.5% y-o-y to $19.9 million due to increased headcount and overtime, especially in the medical devices segment, on the back of the higher revenue.
Other operating expenses increased by 16.1% y-o-y mainly due to the rise in electricity tariff as well as higher tooling expenses and repairs and maintenance.
No dividends were declared for the period.
As at end-January, cash and cash equivalents stood at $5.5 million.
Looking ahead, the group says it expects its revenue to continue growing for the rest of the year ending July, although the rate of growth can be expected to moderate due to the effect of a higher base.
It adds that it is cautiously optimistic about its revenue growth over the remainder of FY2022, while keeping an eye on the impact of increasing operating costs, disruptions or slowdown in the logistics or supply chain and higher development and expansion costs.
“The medical device segment’s positive revenue momentum is expected to continue, albeit with some headwinds and higher costs that we have to mitigate. We have continued to expand our manufacturing capacity and our capability to provide attractive solutions to our growing customer base and focused on delivering operational excellence initiatives that can keep our manufacturing footprints competitive,” says Walter Tarca, deputy CEO of the group.
He adds, “Our Changzhou plant extension is on track for opening in the second half of this financial year and will provide needed space for new projects and increase in production. The pipe and pipe fittings segment is also recovering alongside Singapore’s construction sector, and is well-positioned in light of increased public housing launches over the next two years. All in all, we are cautiously optimistic given the current international trading conditions and geopolitical uncertainties.”
As at 11.07am, shares in Vicplas are trading 0.6 cent higher or 3.02% up at 20.5 cents.
Photo: Vicplas
