Salutica's 2Q profit falls on higher costs, declares 0.6 sen dividend

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KUALA LUMPUR (Feb 9): Ipoh-based electronics manufacturing company Salutica Bhd's net profit for its second quarter ended Dec 31, 2017 (2QFY18) fell 43.3% to RM6.01 million from RM10.61 million a year ago, due to a change in product mix, and higher costs.

Quarterly revenue fell 3.6% to RM87.55 million from RM90.80 million in the prior year's corresponding quarter. Earnings per share stood at 1.55 sen, compared with 2.73 sen in 2QFY17.

In a filing with the stock exchange today, the group said it was less profitable in 2QFY18 as it had to incur overtime to fulfil sales orders given the complexities of cable-less products, spend on research and development activities for in-house and customer products, besides the said change in product mix.

It declared a third interim single-tier dividend of 0.6 sen per share, payable on March 15.

In the first half of the financial year (1HFY18), Salutica turned in a net profit of RM12.47 million, down 22.7% from RM16.13 million previously, due to the same reasons for its quarterly earnings decline.

Cumulative revenue, however, was up 4.6% to RM171.35 million from RM163.86 million, contributed mainly by the sale of bluetooth headsets.

In the filing, Salutica said the group believes its prospect remains favourable.

"The Group has taken initiatives to identify additional production processes suitable for automation to enhance productivity.

"[Expanding] the touch-enabling functionality application to other various industry segments — such as automotive and electronic appliances — will be one of the segments which our group will continue to focus [on] in order to generate additional revenue stream, albeit at a slower pace," read the filing.

It also updated that the development of its healthcare related products under Salutica's in-house brand FOBO is still ongoing, and that the group has started to identify additional production processes suitable for automation so as to lift productivity.

Salutica specialises in the designing, developing and manufacturing of consumer and business electronic products, such as bluetooth stereo headsets, smart watches, and precision light guides for optical touch screen system.

Shares in Salutica fell four sen or 4% today to close at its 19-month low of 96 sen, giving it a market capitalisation of RM378.3 million.