Willas-Array Electronics (Holdings) has reported earnings of HK$37.3 million ($6.4 million) for the 3QFY2021 ended December, from losses of HK$4.5 million a year ago.

This is mainly due to higher gross profit due to an increase in revenue from the market segments that benefitted from the company’s services. The earnings were also attributable to a decrease in clearance of buffer stocks compared to 3QFY2020, as well as a reversal of stock provision of HK$12.0 million in 3QFY2021.

In 3QFY2020, a stock provision of HK$18.8 million for slow-moving inventories was made.

This marks the third straight profitable quarter for the Mainboard-listed company.

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For the 9MFY2021, Willas-Array posted earnings of HK$59.7 million from losses of HK$60.3 million in the corresponding period the year before.

Basic earnings per share (EPS) stood at 43.76 HK cents for the 3QFY2021 and 70.04 HK cents for the 9MFY2021, compared to loss per share of 5.29 cents in the 3QFY2020 and 70.80 cents in the 9MFY2020.

Revenue for the 3QFY2021 grew 24.8% y-o-y to HK$1.06 billion, driven by a strong double-digit growth from eight out of nine of the group’s market segments.

For the 9MFY2021, revenue was up 9% y-o-y to HK$2.75 billion.

Gross profit for the 3QFY2021 surged 54.9% y-o-y to HK$88.3 million, while gross profit for the 9MFY2021 was up 44.3% y-o-y to HK$225.4 million.

3QFY2021 gross profit margin (GPM) rose to 8.3% from 6.7% for the year, on higher sales from market segments and decrease in clearance of buffer stocks, as well as reversals of stock provision.

GPM for the 9MFY2021 was up to 8.2% from 6.2% previously.

The group says the sharp increase in sales of consumer electronic products and home office equipment came from the new norms of working from home and more consumers staying at home.

This strong demand was reflected in the revenue performance of the Group’s Home Appliance, EMS, Audio and Video and Lighting segments, which rose y-o-y in 9MFY2021 by 4.8%, 16.7%, 7.6% and 19.7%, respectively.

The series of economic and business support policies introduced by the Chinese government also served as a growth driver to spur strong domestic demand in the second half of 2020, lifting the performance of Willas-Array’s Industrial, Home Appliance and Automotive segments, says the group.

It adds that it expects the current trends and the new normal as well as the momentum of new product development to be sustained, which will lead to continuous growth in these market applications.

SEE: Willas-Array sinks into the red on one-time losses; revenue up 7.4%

On that, the group says it is “cautiously confident” that its FY2021 performance will beat its performance in FY2020.

“Despite the positive outlook for our domestic China market, we are mindful that the global Covid-19 situation remains fluid. Despite the gradual rollout of Covid-19 vaccines, there are public concerns about the efficacy of these vaccines due to adverse reports about side effects,” says Willas-Array’s chairman Lawrence Leung.

“In addition, there appears to be a resurgence of the virus in certain countries and reports about new strains. Such challenges will continue to undermine the global economy and business environment as some countries have returned to lockdown mode and this will in turn have an impact on our industry.”

““Furthermore, the ongoing tense relations between the US and China may continue to present challenges to trade between the two nations. Nevertheless, in view of the Chinese government’s economic and business support policies, the Group expects China’s economy to be resilient with great potential for growth,” Leung adds.

Shares in Willas-Array closed 3.5 cents higher or 7.1% up at 52.5 cents on Feb 10.