Aztech's Q1 profit falls 27.5% on one-off start-up costs

SINGAPORE - Mainboard-listed Aztech Group reported on Monday a 27.5 per cent year-on-year fall in net profit to $1.22 million for the first quarter ended March 31, 2015, due largely to higher administrative expenses from one-off start-up costs.

Administrative expenses for the quarter rose 5.5 per cent to $5.2 million from the setting up of a central kitchen and opening of its Kay Lee outlet in Suntec, and associated running costs.

The company, which has businesses ranging from electronics to food, said Q1 revenue was $85.59 million, in was in line with the year ago figure, as lower revenue from its material supply and marine division was offset by higher revenue from its electronics division.

Gross profit came to $7.85 million, down 7.8 per cent from a year ago, due to higher depreciation costs associated with a new shipyard acquisition and the offsetting effect from the business segment mix.

Earnings per share slipped to 0.25 cent from 0.35 cent in year-ago quarter.

"Market demand for LED Lighting products may gain further traction in the next quarter and next 12 months and when such increase in demand materialises, the Group could stand to benefit from more orders through its collaborative joint development programme," the company said.

The group said it was "cautious" going forward as it expects "elevated headwinds for the next 12 months as a result of continuous volatility in foreign exchange and persistent low inflation posing market uncertainties and challenges."

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