Singapore Corporate News - 20 Aug 2007

Micro-Mechanics earnings up 7.4% at $8.3m

PRECISION tool maker Micro-Mechanics Holdings has posted a 6.8 per cent gain for Q4 net profit to $2.2 million, lifting its full-year earnings to $8.3 million or a 7.4 per cent year-on-year growth.

Its performance was achieved despite slow revenue growth in the second and third quarters of its financial year, following a record quarterly sales of $8.93 million for Q1.

Revenue for the three months ended June 30 climbed 6.6 per cent to $8.94 million, overtaking a record figure for Q1. For the entire year, group revenue was up 9.4 per cent to $34.7 million.

As of June 30, the group has cash and cash equivalents of $13.6 million, up from $12.9 million in FY2006. It has proposed a final dividend of 2.5 cents per share. Including a special dividend of 1 cent, and an interim dividend of 1.5 cents, Micro-Mechanics will be posting a total dividend of 5 cents per share for the year.

Key to its growth was the development of its Malaysia and China markets. These markets helped buoy the slumps felt in Singapore and Thailand, where sales declined 13 per cent and 18 per cent respectively to $2.5 million and $1.8 million.

Sales in Malaysia, its single biggest market, jumped 14.6 per cent to $6.9 million. It was followed by China, where sales grew 8.2 per cent to $4.8 million.

Taiwan and the US, however, registered the biggest growth rates. Sales to Taiwan reached $3.5 million, from $2.5 million a year ago, while that for the US gained 20.8 per cent to $4.1 million. Revenue from Europe grew 13 per cent to $3.3 million.

Although mindful of cost and selling price pressures going ahead, the group plans to centre its focus on quality, cost and operational improvements. With a lower capital spending budget, it will look towards optimising its capacity and improving operational efficiency.

The group said in a statement: 'With five factories in Asia, an office in Taiwan and a newly-established direct presence in Indonesia, and an intensification of our sales efforts to reach out to customers in the region, we feel Micro-Mechanics is strongly positioned to participate in, and take advantage of the semiconductor industry's ongoing shift to the new trends emerging in Asia.'