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Valuetronics posts 3Q earnings up by 2.6% to $10.3 mil despite dip in revenue

Samantha Chiew
Samantha Chiew • 2 min read
Valuetronics posts 3Q earnings up by 2.6% to $10.3 mil despite dip in revenue
SINGAPORE (Feb 12): Valuetronics Holdings announced that its 3Q19 earnings have increased by 2.6% to HK$59.7 million ($10.3 million) from HK$58.2 million in 3Q18.
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SINGAPORE (Feb 12): Valuetronics Holdings announced that its 3Q19 earnings have increased by 2.6% to HK$59.7 million ($10.3 million) from HK$58.2 million in 3Q18.

This brings 9M19 earnings to HK$153.7 million, 2.6% lower than HK$157.7 million in 9M18.

During the quarter, revenue dropped by 7.5% to HK$729.6 million from HK$788.3 million a year ago.

Revenue from the consumer electronics division decreased by 26.4% y-o-y to HK$295.2 million, mainly attributable to the slowdown in demand from some of the group’s customers in the smart lighting business.

The drop in revenue was however offset by a 12.2% y-o-y increase in revenue from the group’s industrial and commercial electronics division to HK$434.4 million, due mainly to the increase in demand from some of its industrial and commercial electronics customers.

But as cost of sales dropped 9.0% y-o-y to HK$613.8 million, gross profit came in at HK$115.8 million, 1.8% higher than HK$113.7 million in the previous year. Gross profit margin improved by 1.5 percentage points to 15.9%.

Selling and distribution expenses decreased by 10.2% y-o-y to HK$10.9 million, while administrative expenses increased by 10.3% y-o-y to HK$43.7 million.

As at end-Dec, the group’s cash and cash equivalents stood at HK$754.9 million.

On the outlook, continued trade tensions have driven the Group’s customers to adopt a more diversified procurement strategy as they evaluate options of assembling products outside China to mitigate the impact of tariffs on goods imported to the US market.

Hence, the group is currently exploring options to diversify its manufacturing footprint into North America and the Southeast Asian countries.

Barring unforeseen circumstances, the group expects to remain profitable for FY19.

Shares in Valuetronics last traded 2.74% higher at 75 cents on Monday.

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