GP Industries Q3 earnings decline 9.4%

SINGAPORE - GP Industries on Wednesday posted a 9.4 per cent drop in third-quarter earnings, dragged down largely by additional provisions and currency losses.

Net profit for the three months to Dec 31 sank to S$8.1 million, compared with the S$8.9 million from the same period previously, said the electronics and batteries manufacturer in a filing to the Singapore Exchange.

This was even as revenue rose 6.3 per cent to S$271.8 million.No dividend was declared for the period.

GP Industries said it made additional doubtful debt provisions of about S$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 and the Chinese yuan appreciated by around 9 per cent and 7 per cent against the Singapore dollar respectively, along with higher costs for staff, office rental and IT.

For the nine months, net profit jumped 12.9 per cent to S$27 million, while revenue grew 8.7 per cent to S$740.1 million.

Earnings per share for the quarter fell to 1.66 cents, compared with the 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" the sales of battery products, particularly in emerging markets, even as lower commodity prices and the weakened Renminbi exchange rate will likely reduce the impact of rapidly increasing manufacturing costs in China.

"In view of the uncertain economic outlook, the group will continue to maintain a healthy balance sheet and invest in technology, product development and brand building."