Micro-Mechanics' net profit soared 64.1% to S$1.4m

But bosses brace for further headwinds.

Mainboard-listed Micro-Mechanics Ltd. reported an increase in net profit to S$1.4 million for the three months ended 31 March 2013. This was 64.1% higher than its net profit of S$0.9 million in 3Q12. 

While Group revenue in 3Q13 eased 1.5% to S$9.2 million, net profit grew on the back of improved gross profit margin of 47.7% (46.0% in 3Q12) and higher other income arising from machinery disposal gain. Operating expenses remained unchanged due to the Group’s close watch on its expense structure.

For the nine months ended 31 March 2013, the Group’s net profit increased 25.3% to S$3.6 million from S$2.9 million in 9M12, thanks to higher GP and other income. Revenue for 9M13 was stable at S$28.4 million, supported by the semiconductor tooling division which saw modest sales growth of 2.2%.

Said Mr Chris Borch, CEO of Micro-Mechanics, “During 3Q13, the Group continued benefiting from the investments, time and energy we have put into improving operational efficiency and productivity. This was reflected in our GP margin which has improved in the past three consecutive financial quarters.

As we enter the last quarter of FY2013, business visibility remains clouded by numerous global uncertainties. The semiconductor industry is expected to register a modest single-digit recovery rate in 2013.

Together with increasing cost challenges, the operating environment is likely to stay challenging. For the Group to remain successful in the long term, we are sharpening our focus on customers by enhancing the value we bring to their businesses.

To reduce our reliance on labour and maintain our competitive position, we are working to implement automated production processes that are repeatable, scalable and cost-effective.

We will focus especially on areas that help us to reduce set-up time, improve product quality and enhance factory utilisation rates.”

As at 31 March 2013, the Group’s balance sheet had total assets of S$42.5 million, shareholders’ equity of S$36.5 million, cash and cash equivalents of S$7.4 million and no bank borrowings.