Innotek swings back, sees $5m profit

New management drove earnings.

Metal components manufacturer Innotek Limited ended 3Q16 with a smile as it reversed a $3.5m loss last year to a $5m profit this year.

This came despite the 4.8% decline in revenue to $55.8m from $58.6m last year.

The group said its second quarter of profitability was due to the operational improvements under a new management leadership.

“Despite the challenging operating environment, our improved performance for two consecutive quarters which resulted in a turnaround from losses, underscore the success of our restructuring initiatives,” Innotek executive director Lou Yiliang said.

Gross profit for 3Q16 improved 351.9% to $12.2m from $2.7m a year earlier, while gross profit margin improved 4.76 times to 21.9% from 4.6%, respectively.

Meanwhile, cost of sales decreased by 22.1% to $43.5m in 3Q16 from $55.9m in 3Q15. According to the group, this was mainly attributed to lower cost of materials mix towards the Assembly segment, reduced headcount, a lower depreciation as well as increased in-house production which reduced subcontract expenses.