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Frencken Group's 1H20 earnings dip 4.9% to $18.7 mil

Felicia Tan
Felicia Tan • 2 min read
Frencken Group's 1H20 earnings dip 4.9% to $18.7 mil
Shares in Frencken closed 8 cents higher, or 6.9% up, at $1.24 on Aug 13, prior to the announcement.
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For the 1H20 ended June, Frencken Group registered earnings of $18.7 million, down 4.9% from the $19.7 million a year ago.

This translates to earnings per share (EPS) of 4.39 cents for the period on a fully diluted basis.

Revenue for the same period dropped 9.6% y-o-y to $292.5 million on the back of lower revenue contributions from the Mechatronics and IMS Divisions due to the Covid-19 pandemic.

Segmentally, the group’s Mechatronics Division saw a 3.9% y-o-y dip in revenue to $250.9 million mainly due to the decline in sales of the analytical and industrial automation segments. The dip was partially offset by the higher sales from the semiconductor segment.

Likewise, the IMS Division registered a 33% y-o-y decline in revenue to $42.3 million due to a “significant reduction” in the automotive sales segment, which fell 37.3% y-o-y. The decline in automotive sales came as a result of the measures implemented by the respective governments to contain the spread of Covid-19, and an overall slowdown in end-user demand.

As a result of the lower revenue, gross profit fell 14.5% y-o-y to $45.4 million.

Gross profit margin fell 9 percentage points to 15.5% in 1H20 mainly due to the softer gross profit margin of the automotive segment.

Other income surged 256.5% y-o-y to $4.5 million in 1H20 due mainly to grants from the job support scheme of the Singapore government. The growth was also attributable to grants from various governments to alleviate the impact of the pandemic, and an investment incentive for our plant in Chuzhou, China.

Frencken also logged higher net foreign exchange gain in 1H20 compared to the year before.

As at end June, cash and cash equivalents stood at $114.2 million.

Shares in Frencken closed 8 cents higher, or 6.9% up, at $1.24 on Aug 13, prior to the announcement.

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