SINGAPORE (May 2): Hi-P International announced 1Q19 earnings increased by 5.7% to $10.7 million, compared to $10.1 million in 1Q18.

This came on the back of a 2% increase in revenue to $286.8 million from $281.1 million last year, while gross profit margin declined to 12.6% in 1Q19 from 13.4% in 1Q18.

This was mainly due to price pressure and a change in product mix with more lower margin high component content assembly products

But as cost of sales increased by 3.0% y-o-y to $250.6 million, gross profit for the quarter was 4.3% lower at $36.2 million compared to $37.8 million a year ago.

Other income increased by 39.2% to $2.2 million from $1.6 million in the previous year, mainly consisted of incentives from governments, rental income from the lease of factory building and investment properties, and gain from sale of scrap materials.

Other expenses declined by 70.9% to $3.3 million compared to $11.3 million last year, mainly due a $7.9 million y-o-y decrease in net losses arising from foreign exchange and fair value on hedging contracts.

As at Mar 31, the group’s cash and cash equivalents stood at $276.2 million.

Yao Hsiao Tung, executive chairman and CEO of Hi-P says, “Market remains challenging but we are endeavouring to turnaround situation by penetrating different product fields through organic or inorganic ways. To this end, we have expanded our sales force in the United States and Europe and working on strengthening our sales force in Asia. While manufacturing industry gears up for Industry 4.0, we are working relentlessly on automation and computerisation with artificial intelligence aided to enhance system flows. By doing so, we plan to reduce reliance on labour force and eliminate unnecessary paperwork.”

“Although trade war has yet to reach an end, we will continue with the implementation of our formulated corporate strategies to turn such impact into opportunities as I mentioned in the results press release for last quarter,” adds Yao.

Shares in Hi-P closed at $1.43 on Thursday.