SINGAPORE (Nov 14): Precision metal components manufacturer InnoTek has recorded earnings of $5.0 million in 3Q16, reversing out of a loss of $3.5 million in the same quarter last year.

In a filing to SGX on Monday, InnoTek says this is the “second consecutive quarter of profitability following operational improvements under a new management leadership”.

Revenue fell 4.8% to $55.8 million in 3Q16, from $58.6 million in the same quarter last year.

The lower revenue was mainly due to lower sales from office automation and consumer products in the precision components and tooling segment. This was as a result of new production programmes by Japanese office automation brands being relocated to lower-cost countries.

This was partially mitigated by higher sales of TV bezels to two major Taiwanese customers during the quarter.

However, gross profit more than quadrupled to $12.2 million in the quarter ended Sept, compared to $2.7 million in 3Q15, on the back of a 17.3-percentage-point increase in gross profit margin to 21.9%.

Cost of sales fell 22.1% to $43.5 million in 3Q16, from $55.9 million in the same period last year.

According to InnoTek, the improvements in performance and margins follow operational changes to reduce costs, increase productivity and strengthen customer engagement were introduced under a change in leadership. New CEO Lou Yiliang was appointed on Nov 2, 2015.

“Despite the challenging operating environment, our improved performance for two consecutive quarters which resulted in a turnaround from losses, underscore the success of our restructuring initiatives,” says Lou.

Lou adds that InnoTek will “continue to build on the momentum of the restructuring while seeking to move up the value chain, maintain existing customers and add new customers with a view to enhancing shareholder value”.

InnoTek last closed at 18.1 cents on Nov 11.

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