Despite doubling its revenue and improving its gross profit, Asia Enterprises Holding A55 has reported earnings of $3.7 million in FY2022, unchanged from the earnings it achieved in FY2021.
The company reports profit before tax of $5.5 million in FY2022, 37% higher from the previous year. This was achieved on the back of a 108% jump in revenue to $73.5 million, driven by relatively higher average selling prices and an increase in sales volume.
However, income tax expenses increased significantly to $1.7 million in FY2022, mainly due to the absence of unutilised losses and enhanced building allowances which had been fully utilised in prior financial years.
Due to this, net profit before tax for 2HFY2022 contracted 46% y-o-y to $1.3 million.
Asia Enterprises’s gross profit for FY2022 increased 20% to $13.6 million, while gross profit for 2HFY2022 was stable at $6.2 million.
Meanwhile, gross profit margin declined to 18.5% in FY2022 and 14.7% for 2HFY2022. This decline was attributed mainly to an increase in bulk ordering by customers.
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Asia Enterprises has recommended the payment of a final dividend of 0.8 cent per share in respect of FY2022 which translates to a payout ratio of 72.7% of the company’s net profit.
The company’s managing director Yvonne Lee says the company maintains a cautious business outlook for FY2023 in view of the myriad uncertainties that continue to weigh on the global economy and steel market.
“The steel industry in Singapore is expected to experience challenging operating conditions due to increased volatility of international steel prices, inflationary cost pressures and heightened competitive conditions amid a backdrop of potentially slower demand from steel industrial end-users,” she says.
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“To be prepared for potential opportunities and challenges in the global business environment, the company will remain vigilant in our sales and credit management, as well as maintain tight control of our operating expenses. We will also take a prudent approach in inventory management while ensuring sufficient steel inventory and mix of products to meet the project requirements of customers,” adds Lee.
Shares in Asia Enterprises closed 0.4 cents higher or 2.6% up on Feb 9 at 15.9 cents.
