Sunningdale Tech, a manufacturer of precision plastic components, said its net profit for the third quarter ended 30 Sept 2016 surged 48.7% year-on-year to S$7.9 million.

This excludes the impact from foreign exchange gains and the reversal of/allowance for impairment losses.

khooboohor5.16“We continue to face rising costs and pricing pressure from customers. We are, however, supported by a diversified blue-chip customer base and continue to expand upon our wide product offering. Following the restructuring exercise we conducted in the previous quarter, we remain focused on driving operational efficiency and adopting a leaner business model in order to improve the utilisation rates of our manufacturing plants. This has allowed us to maintain our gross profit margin of 14.2% while improving our EBITDA margin to 10.6%.

 

-- Khoo Boo Hor, CEO & Executive Director

The Group continued to generate strong positive operating cash flows of S$25.1 million.

Cash and cash equivalents amounted to S$110.4 million. This bolstered the Group’s balance sheet strength as it returned to a net cash position of S$4.9 million after accounting for loans and borrowings of S$105.5 million. 


Sunningdale said in spite of difficult economic conditions, the Group’s automotive segment revenue rose 7.0% to S$61.7 million.

Revenue from the Consumer/IT segment remained stable at S$72.8 million.

This was offset by the declines in revenue for both Healthcare and Mould Fabrication segments, to S$11.3 million and S$26.6 million respectively.

Overall, the Group’s total revenue dipped 2.3% to S$172.5 million, dragging the Group’s gross profit down 3.3% to S$24.4 million.

Gross profit margin declined by 0.1 percentage points to 14.2%.


But the Group managed to grow its Earnings Before Interest, Taxes and Depreciation (“EBITDA”) by 10.5% yoy to S$18.3 million.

Correspondingly, the Group’s EBITDA margin improved from 9.4% for 3QFY2015 to 10.6% for 3QFY2016.

Over the quarter, the Group recorded a foreign exchange gain of S$2.3 million compared to an S$11.0 million gain in the preceding year.

In addition, other expenses decreased mainly due to an impairment allowance of S$0.5 million on plant, property and equipment for 3QFY2015.

Stock price  $1.045
52-week range 79.5c-$1.345
Market cap S$196 m
Price Earnings 6.3x
Dividend yield 4.76%
YTD return 11.8%
Source: Bloomberg

Said CEO Khoo Boo Hor: "We are committed to enhancing our competitive edge as we reinvest in our best-in-class precision engineering capabilities. This allows us to build upon our expertise while servicing customers on a global scale. We remain cautiously optimistic as we are encouraged by the incoming business enquiries from new and existing customers who are drawn to our global manufacturing footprint’s ability to handle large-scale projects in different geographic regions.

"In difficult economic conditions, change is the only constant as we adapt and remain vigilant to business headwinds such as rising labour costs and volatility in foreign exchange markets. Despite a challenging business environment, our long-term vision of building a sustainable and profitable business model remains on track.” 

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