SINGAPORE (Aug 13): Fu Yu Corp reported 2Q19 earnings fell by 13.8% to $3.5 million from $4.0 million in 2Q18.

However, group earnings for 1H19 increased 10.7% to $5.0 million from $4.6 million in 1H18.

In 2Q19, revenue growth was flattish, dropping 1.5% to $50.1 million from $50.8 million a year ago.

Sales of the group’s operations in Singapore were stable while higher sales of its operations in Malaysia helped to partially offset the lower sales from its China segment. On a quarter-on-quarter basis however, group revenue was 7.2% higher than $46.7 million recorded in 1Q19.

Cost of sales dropped 4.3% to $40.4 million, bringing gross profit for 2Q19 to $9.7 million, 12.7% higher than $8.6 million in 2Q18.

Other operating income decreased by 96% to $91,000 from $2.3 million a year ago, due mainly to lower foreign exchange gain as a result of the depreciation of the US dollar against the functional currencies of the respective companies in the group.

As at end June, the group’s cash and cash equivalents stood at $76.8 million.

The board has recommended an interim dividend of 0.35 cent per share, which will be payable on Sept 3.

Fu Yu says it aims to deliver sustainable and profitable growth over the long term.

To achieve this, it will continue to focus on executing its strategic initiatives, such as increasing its business development efforts to expand market share and secure new customers; diversify its customer base across target market segments; focus on products that have longer life cycles and higher growth potential; and continually improve its operations to achieve optimal capacity utilisation, high production efficiency and lean cost structure.

Looking ahead, the group says that it will continue to seek ways to further optimise the cost structure of its operations in the region, such as rightsizing or consolidation of operations, or the sale/lease of unutilised factory space if suitable opportunities arise.

Shares in Fu Yu closed at 22 cents on Tuesday.