Debt provisions and currency exchange losses helped send third- quarter earnings down at GP Industries.
The electronics and battery manufacturer announced in a separate statement that Mr Victor Lo, who is executive director and chairman of the company, has been appointed as chief executive with effect from yesterday.
Mr Lo, 65, is also chairman and chief executive of Gold Peak Industries (Holdings), the holding company of GP Industries, and the chairman and chief executive of GP Batteries International, a principal subsidiary.
GP Industries reported that net profit for the three months to Dec 31 sank 9.4 per cent to $8.1 million, compared with the same period a year earlier. But revenue rose 6.3 per cent to $271.8 million.
The group said it made additional doubtful debt provisions of about $4 million during the quarter, "as a prudent measure against the weakening economy in China".
It also logged higher expenses as the Hong Kong dollar appreciated by around 9 per cent against the Singapore currency while the Chinese yuan rose by 7 per cent. Costs for staff, office rental and IT also increased.
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AT A GLANCE
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REVENUE $271.8 million (+6.3%)
NET PROFIT $8.1 million (-9.4%)
No dividend was declared for the period.
Net profit for the nine months jumped 12.9 per cent to $27 million, while revenue rose 8.7 per cent to $804.7 million. Earnings per share for the quarter fell to 1.66 cents, compared with 1.81 cents previously, while net asset value per share stood at 74.5 cents as at Dec 31, up on the 72.51 cents as at March 31.
"Economic outlook is expected to be uncertain for many markets, which could affect exchange rates and consumer demand, although some of the group's businesses in the US are expected to strengthen," said GP Industries.
It noted that the economic slowdown will continue to "adversely affect" sales of battery products, particularly in emerging markets, even as lower commodity prices and the weakened yuan exchange rate will likely reduce the impact of rapidly increasing manufacturing costs in China.
GP Industries shares dropped half a cent to 61.5 cents at its last close on Jan 7.
The group has carried out a series of daily share buybacks since early last year.
