Tee International hammered by rising one-time expenses

Led to a starkly disappointing 1QFY14.

Tee International’s 1QFY14 PATMI dipped 67.5% YoY to S$0.9m mostly due to S$1.9m in unrealized foreign currency losses and a S$2.8m spike in admin expenses, according to OCBC Investment Research's Eli Lee.

The increase in admin expenses consist of a one-time S$1.1m incentive payment to employees, S$0.7m from the newly acquired integrated turnkey material-handling subsidiary, and staff costs from a higher headcount, Lee noted.

"1QFY14 PATMI constitutes only 4.1% of our FY14 forecast and we judge this quarter to be a miss. That said, if we adjusted for the one-time incentive payment and currency losses, core PATMI is estimated at S$5.6m which would have made up 25.0% of our forecast and been in line. Our fair value estimate dips to S$0.35, versus S$0.38 previously, as we lower our FY14 PATMI forecast down by 26% to S$16.6m," said Lee.