Micro-Mechanics Q4 profit up 21.4% on higher sales

Micro-Mechanics continues to believe that the semiconductor industry is poised for a prolonged period of solid growth.
Micro-Mechanics continues to believe that the semiconductor industry is poised for a prolonged period of solid growth.PHOTO: MICRO-MECHANICS

SINGAPORE (THE BUSINESS TIMES) - Micro-Mechanics Holdings, which makes precision tools and parts for the semiconductor industry, reported net profit of $4.8 million for the fourth fiscal quarter ended June 30, up 21.4 per cent from $3.9 million in the same period last year.

This pushed the company's earnings for financial year (FY) 2021 to $18.1 million, 23.3 per cent higher than earnings of $14.7 million in FY2020.

Earnings per share (EPS) for Q4 rose to 3.44 cents from 2.83 cents in the year-ago period, while EPS for FY2021 was up to 12.99 cents from 10.54 cents in FY2020.

The higher net profit for Q4 was primarily attributable to a 16.9 per cent increase in revenue to a quarterly record-high of $19.1 million from $16.4 million in the year-ago period, on the back of "broad-based sales growth" across a number of the group's markets. The only exceptions were Taiwan and Japan.

Cost of sales for the quarter rose 18.1 per cent to $8.8 million from $7.5 million in Q4 last year. Gross profit consequently was up by a more muted 15.9 per cent year-on-year to $10.3 million from $8.9 million.

The company's board of directors is recommending a final dividend of six Singapore cents per share and a special dividend of two cents per share for FY2021. This brings the group's total dividend for FY2021 to 14 cents per share, versus 12 cents per share in FY2020.

If approved by shareholders at the annual general meeting on Oct 29, the dividends will be paid out on Nov 19.

Chris Borch, chief executive of Micro-Mechanics, said: "The group has benefited from the resilience of the global semiconductor industry which continued to show steady growth amid the economic headwinds from the Covid-19 pandemic.

"Despite facing many challenges during this unprecedented period, the group was able to deliver record revenue and profits in FY2021. In addition to rewarding shareholders, our decision to raise the total dividend payout again in FY2021 is a signal that we remain confident in the long-term prospects of Micro-Mechanics."

Micro-Mechanics continues to believe that the semiconductor industry is poised for a prolonged period of solid growth as chips become increasingly embedded in almost every aspect of modern life.

The company said its continued success will hinge on its ability to "identify opportunities and prioritise the initiatives and investments that enhance stakeholder value".

Shares of Micro-Mechanics closed on Friday at $3.18, up 0.3 per cent or $0.01.