Serial System swings back to profitability in 1H

Serial System swings back to profitability in 1H

By: 
Samantha Chiew
04/08/17, 07:04 pm

SINGAPORE (Aug 4): Serial System, the distributor of electronic components and consumer products, posted earnings of US$6.1 million ($8.3 million) in 1H17 compared to a loss of US$3.3 million in 1H16 on higher margins and smaller losses from associates.

The group’s total revenue of US$706.9 million in 1H17 was 1% lower compared to US$711.4 million a year ago. Revenue from electronic components distribution business increased 17% to US$677.3 million on growth in Hongkong, China and South Asia Pacific.

Gross profit margin inched up to 7.1% in 1H17 from 6.6% in 1H16, driven mainly by the higher margin achieved by the consumer products distribution business. The electronic components distribution business posted lower gross profit margin in 1H17 affected by keen competition.

Serial System’s share of losses from associated companies narrowed to US$0.6 million in 1H17 from losses of US$3.7 million a year earlier, when Bull Will Co had to make significant provisions for doubtful debts and inventory obsolescence. Bull Will, in which Serial System has a 29.03% stake, manufactures magnetic components for electronic products.

Despite keen competition, the Group expects to remain profitable in FY2017 as global semiconductor sales worldwide could reach a new high this year, according to Derek Goh, Serial System’s Executive Chairman and CEO, citing recent data from Gartner.

The board is recommending an interim dividend of 0.29 cent per share.

Shares in Serial System last traded at 18 cents.

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