SINGAPORE (Sept 11): Stamford Tyres reported earnings of $0.1 million for the 1QFY19 ended July, down 94.2% from $1.9 million in 1Q18 earnings due to lower revenue and gross profit margin, as well as share of losses from joint ventures.
Revenue for the quarter fell 1.7% to $58 million from $58.9 million a year ago, due mainly to lower sales in Southeast Asian markets.
Gross profit margin decreased y-o-y to 22.1% from 2.67% previously as cost of sales in tyres as well as cost of wheel production grew over the quarter.
Meanwhile, total operating expenses fell by 4% to $13.8 million from $14.4 million in 1Q18. The decrease was mainly due to write-back of inventory obsolescence and lower staff costs, offset by higher marketing and distribution costs.
Over the latest quarter, the group registered a share of loss of joint ventures amounting to $41,000 compared to a $0.4 million gain in 1Q18. This was mainly due to lower sales from both joint ventures and the strengthening of the RMB during the period under review, says Stamford.
As at end-July, cash and cash equivalents stood at $16.2 million, down from $21.9 million a year ago on a reduction in payables.
Going forward, Stamford says its operating environment in the tyre business remains challenging as a result of global oversupply and intense competition. As such, the group intends to continue optimising its product mix, managing operating costs, and building on its core markets in Southeast Asia.
Shares in Stamford closed 3 cents higher at 33 cents on Monday.
