SINGAPORE (Feb 26): Serial System on Saturday announced FY17 earnings of US$9.6 million ($12.6 million), double its full year earnings of US$4.6 million posted a year ago.
The stronger bottomline came on the back of an overall improvement in sales and profit margins as well as substantially smaller losses from associated companies.
The group has proposed a final dividend of 0.46 cent, which brings the total payout for FY17 to 0.75 cent compared to 0.35 cent a year ago.
For the 4Q ended Dec 2017, group earnings fell 91% to US$0.4 million from US$4 million in 4Q16, as net profit margin declined by 1.1 percentage point to 0.1% from 1.2% previously.
FY17 sales revenue grew 6% to a record US$1.5 billion from US$1.4 billion in FY16.
The increase in sales was largely attributable to 17% higher contributions from the electronic components distribution business, which came on the back of higher demand from new and existing customers in Taiwan, Hong Kong, Taiwan and South Asia.
Meanwhile, revenue from the consumer products distribution business fell 69% compared to FY16 as a result of the group’s efforts to streamline the business by reducing sales of low-margin products and exit non-performing markets.
The move however helped to lift overall gross profit margin for FY17 to 7% from 6.9% in the previous year, says Serial System.
Over FY17, it also booked a smaller loss of US$0.4 million compared to its loss of US$3.9 million in FY16 due to smaller losses at its 19%-owned subsidiary, Bull Will.
Serial System expects to remain profitable in FY18 amid a generally buoyant outlook for the semiconductor market, with global semiconductor sales to be underpinned by firm demand for integrated circuits this year.
“With the global semiconductor market still expected to remain buoyant in the foreseeable future, we believe we will be able to perform reasonably well in 2018. We will, at the same time, continue to keep a close watch on competitive and cost pressures and seek to remain nimble in order to uphold profit margins and better meet the needs of our customers,” says group CEO and chairman, Derek Goh.
As at 11.13am, shares in Serial System are trading 1.7% lower at 17 cents.