Spindex Industries 564 % has reported 31.6% decline y-o-y in its net profit to $6.1 million in its 1HFY2023 ended Dec on lower gross profit and higher effective tax rate.
Under challenging business conditions, the company’s revenue contracted by 13.2% to $94.2 million in 1HFY2023 compared to the previous corresponding period.The decline was broad based across the business sectors of the group.
Cost of sales fell by a smaller 10.5% as inflationary pressures contributed to higher prices for utilities, transportation and some raw materials.
This resulted in the gross profit falling 24.3% to $15.9 million and a compression of gross profit margin from 19.4% in 1HFY2022 to 16.9%.
With the full utilisation of reinvestment allowances of its Malaysian plant, Spindex’s effective tax rate increased slightly to 21.3%.
For the 1HFY2023, Spindex’s net cash flow stood at $7 million. After the purchase of property, plant and equipment, distribution of dividends and the repayment of loans and borrowings, the cash and cash equivalents stood at $38 million. Meanwhile, loans and borrowings totalled to $9.9 million.
See also: TDCX reports 1QFY2023 profit of US$20.5 mil, 22.5% higher y-o-y
In its outlook statement, Spindex expects the cautious and uncertain environment to prevail for the rest of the current financial year. The company will focus on growing and serving its customers by remaining relevant to them while at the same time managing the cost pressures to mitigate their financial impact.
Steady progress will continue to be made to improve the company’s core competencies and right sizing of resources will be carried out to optimise the group cost competitiveness over the longer term.
Shares in Spindex closed 9.5 cents lower or 9% down on Feb 10 to 95.5 cents.