Meanwhile, the company’s FY2023 revenue of $190.4 million decreased by 20.7% y-o-y from $240.2 million in the year before, which it attributes to the weaker first half of 2023 amid economic uncertainty, geopolitical tensions and a higher interest rate environment.
The majority of Fu Yu Corp’s incurred net loss stems from lower topline and higher labour and energy costs, expenses related to the development of its Smart Factory in Singapore, a foreign exchange (forex) loss of $0.5 million mainly due to the voluntary liquidation of its Fu Yu Moulding and Tooling subsidiary (FYSCS) in Shanghai, as well as the $2.7 million non-cash impairment of goodwill in connection with its investment in FYSCS.
Gross profit also decreased by 64.6% y-o-y from $37.6 million in FY2022 to $13.3 million in FY2023
As such, no dividends have been recommended or declared as the company is in a loss-making position.
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Looking ahead, Fu Yu Corp is seeing gradual post-pandemic business recovery for tooling and plastics components across its three geographies, Singapore, Malaysia and China, particularly, in the medical and consumer sectors. It also expects momentum to build up further towards the second half of 2024.
Its smart factory at 9 Tuas Drive 1 will be completed by April 2024, and will be one of Asia’s most advanced precision manufacturing facilities.
Despite volatility in the business environment, the company remains cautiously optimistic and expects higher contributions from its export tooling business, the bio-medical sector as well as from new customers. Together with the ongoing cost-containment efforts, and barring unforeseen circumstances, Fu Yu Corp expects the overall FY2024 financial performance to improve compared to FY2023.
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David Seow, CEO of Fu Yu, says: “It has been a challenging year for the manufacturers worldwide. To overcome these challenges and seize new opportunities we are implementing major initiatives to deliver sustainable long-term growth. With enhanced capabilities and maiden contributions from new revenues we expect our overall performance in FY2024 to exceed FY2023.”
Shares in Fu Yu closed 0.2 cents lower or 1.52% down at 13 cents on Feb 23.
