SINGAPORE (May 12): Mainboard-listed precision engineering group UMS Holdings booked earnings of $10.7 million for 1QFY2020 ended March, some 53% higher than earnings of $7.0 million the previous year. 

This brings earnings per share (EPS) for the quarter to 2.0 cents from 1.3 cents last year. 

The improved bottom line figures came on the back of a 22% increase in revenue to $34.9 million from $28.6 million in the corresponding period last year, due to increased contributions across both its business segments. 

UMS’s semiconductor segment posted a 17% increase in revenue on the back of increased sales in its semiconductor integrated systems and component sales segments. The group’s Other segment doubled to $3.2 million due to its subsidiary Starke Singapore’s material distribution business.

Compared to the previous year, the group says it saw a “robust improvement in customer demand” as all its key markets registered higher sales for the quarter. Notably, sales from Singapore and Malaysia rose 27% and 25% year-on-year. 

Gross material margins inched up to 53.3% from 53.2% last year as higher margins from component sales were offset by lower margin material distribution sales. 

UMS also bagged an 86% increase in share of profits from its associate, JEP Holdings, to $0.85 million, which had boosted the group’s bottom line figures. 

As at end-March, cash and cash equivalents stood at $38.8 million. 

On the back of improved performance, UMS is proposing a 1.0 cent tax-exempt interim dividend that is slated to be paid out on July 28. The dividend is also double that of the 0.5 cent dividend paid out last year. 

UMS is also expecting to remain profitable in FY2020 barring any “unforeseen circumstances.”

Looking ahead, UMS is bracing itself for near-term challenges in the form of supply chain disruptions and manpower constraints due to the Covid-19 pandemic. 

In light of the challenges, the group is looking to sharpen its production efficiencies and supply networks to cope with the impact, and remains bullish on the long-term outlook of the industry. 

“The long-term outlook however remains positive due to the acceleration of 5G, artificial intelligence (AI) and other technology-driven developments such as Smart Cities and the increased demand for data,” says UMS CEO Andy Luong. 

“Data centre and communications infrastructure sector will prove more resilient as both public and private sector organizations continue to drive strategic investments required to support increased remote working and online access which have accelerated in the light of the Covid-19 pandemic,” he adds. 

Shares in UMS Holdings closed one cent lower, or 1.24% down, at 80 cents on Tuesday prior to the announcement.