SINGAPORE (Feb 13): Mainboard-listed contract manufacturer Hi-P International saw its earnings for 4QFY2019 ended December plunge 50% to $22.4 million from $44.8 million in the previous year. 

This brings the group’s full-year earnings for FY2019 to $80.3 million, some 20.4% lower than $100.9 million in FY2018. 

Revenue for the quarter slid 10.2% to $396.9 million from $441.9 million a year ago. The decline was primarily attributable to price pressures, as well as lower sales volume for certain customers. 

Cost of sales fell 6% to $341.6 million from $363.5 million back in 4QFY2018. 

Correspondingly, gross profit for the quarter totalled to $55.3 million, a 29.5% dip from $78.4 million in the corresponding quarter of FY2018. This came on the back of competitive pricing, as well as less economies of scale, which in turn resulted in the group’s fixed and semi-variable costs being reduced at a slower pace compared to the decrease in sales. 

Gross profit margin fell to 13.9% from 17.7% in 4Q2018.

Hi-P’s total selling, distribution and administrative expenses increased 3.8% y-o-y to $25.8 million on the back of employee share award expenses and annual salary increment. This was, however, partially offset by lower bonus provisions. 

Earnings per share came in at 2.77 cents for the quarter. 

As at end-December, cash and cash equivalents stood at $329.6 million. 

Hi-P is also recommending a final one-tier exempt dividend of 2.0 cents per share, half that of FY2018's dividend of 4.0 cents. 

Looking ahead, Hi-P also announced its profit guidance for FY2020. On a y-o-y basis of comparison, the group  expects to book a lower revenue and profit for 1HFY2020 c but a higher revenue and lower profit for FY2020. 

“Despite the current challenging business conditions, we are garnering momentum in securing new business and pursuing M&A. Internally, we are automating operations and implementing artificial intelligence-aided processes across the group,” says Hi-P’s CEO Yao Hsiao Tung. 

Shares in Hi-P International closed five cents higher, or 3.7% up, at $1.30 on Thursday prior to the results announcement.