Spindex Industries has reported earnings of $6.7 million for the 1HFY2025 ended Dec 31, 2024, up marginally by 6.5% y-o-y from the $6.3 million reported in the same period a year before.
The group is an integrated solution provider of precision-machined components and assemblies for use in machinery and automotive systems, imaging and printing equipment, consumer-lifestyle and healthcare products.
For the period of reporting, earnings per share came in at 5.86 cents, up from the 5.5 cents in the same period a year ago.
The group’s gross profit saw a 8.9% y-o-y increase to $18.8 million, and revenue grew by 4.7% y-o-y to $92.3 million in 1HFY2025.
Spindex says that overall demand remained subdued, but some demand was brought forward in anticipation of higher tariffs to come. Orders were uneven across the different customer and product segments, with some recording modest growth and others some decline.
The MA business segment recorded growth of 3.9% with higher shipments to existing and new customers. Back in FY2024, customers in the IP business segment experienced a degree of overstocking and as inventory was reduced during FY2024, orders rebounded in 1HFY2025 for a revenue growth of 20.6% off a relatively low base.
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The CP business segment comprises a larger number of items with mixed performance, with overall revenue remaining stable.
Gross profit margin for the group improved from a modest 19.6% to 20.4% in the 1HFY2025. The group says that other operating income benefited from a subsidy received from the local government in Nantong, China in relation to the land purchased for the Nantong plant.
Meanwhile, higher distribution and selling expenses were incurred due to higher freight charges partly related to the higher revenue. Weakness in the US Dollar resulted in a higher foreign exchange loss, contributing to the increase in administrative expenses.
The group’s net cash inflows generated came in at $7.2 million, and after the purchase of property, plant and equipment and dividend payment, the net cash and cash equivalents totalled to $1.6 million.
The group’s cash and cash equivalents rose marginally to about $62.0 million. With total loans
and borrowings remaining low at $5.1 million as at Dec 31, 2024, the group says that it is in a strong financial position to capitalise on investment opportunities to strengthen its long term competitive position.
Spindex says that the overall business environment is likely to remain challenging and uncertain in the short and medium term, both due to a softening market and also with new geopolitical tensions and tariffs.
Inflationary conditions could linger for much longer, and the correspondingly elevated interest rates could further hamper demand. With demand likely to remain soft, pressure on prices will continue.
“In response, the group will continue to enhance its operating efficiency by improving its work processes and maintaining an optimal network of manufacturing plants in Asia to support any new as well as relocation of orders to Asean,” it notes.
Shares in Spindex closed flat at 95.5 cents on Feb 11.
