Excessive global output of PCBs hurts earnings at Elec & Eltek

Printed circuit board (PCB) maker Elec & Eltek's second quarter net profit slumped by 64.1 per cent to US$4.2 million (S$5.3 million) as excessive global PCB production capacity forced down average selling prices even though operating costs were rising.

Revenue for the three months to June 30 fell by 3.5 per cent to US$131 million.

The group's new Yangzhou plant faced some teething problems in their next phase of production capacity expansion and did not contribute as much sales output as anticipated.

Financial performance was also impacted by the rising minimum wage in China as well as the appreciation of the yuan during the quarter.

Earnings per share shrank to 2.22 US cents from 6.19 US cents previously.

Net asset value per share slipped to US$1.95 compared to US$2.01 as at Dec 31.

An interim dividend of seven US cents a share was declared, down from nine US cents last year.

It will be paid on Aug 30.

Barring unforeseen circumstances, the board remains confident that the financial performance for the third quarter to Sept 30 will remain profitable.