Broadway Industrial Group (BIG) B69 has reported earnings of $3.1 million for the FY2023 ended Dec 31, 50.9% lower than its earnings of $6.3 million in FY2022.
For the full-year period, revenue decreased 26.6% y-o-y to $258.7 million as sales of hard disk drive (HDD) products came off the excessive levels seen during the pandemic era arising from component shortages and over-optimism during that period.
As a result, cost of sales also decreased 26.1% y-o-y to $14.0 million.
Gross profit in FY2023 fell 33.6% y-o-y to $14.0 million, while gross profit margin (GPM) fell 0.6 percentage points y-o-y to 5.4%.
Earnings per share (EPS) for FY2023 also decreased to 0.68 cents from 1.38 cents in FY2023.
This included a 2HFY2023 earnings turnaround of $4.3 million after a $1.2 million loss in 1HFY2023. This came on the back of a 6.7% y-o-y increase in revenue to $132.3 million for the half-year period, driven mainly by a small rebound in the HDD industry towards the end of 2HFY2023 and the inclusion of small contributions from the group’s precision engineering (PE) business, which commenced operations in May 2023.
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Gross profit margin rose to 7.5% in 2HFY2023 from 4.4% in 2HFY2023 in tandem with higher revenue and management’s ongoing efforts to realign its cost structure.
As at Dec 31, 2023, the group’s net asset value (NAV) per share stood at 25.22 cents.
Cash and cash equivalents as at the same date stood at $33.7 million.
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The group has declared a final dividend of 0.5 cents per share for FY2023.
While CEO Tan Choon Hoong notes that FY2023 was a challenging year for the HDD industry, he is “heartened” to see early signs of a rebound towards the end of the year.
“There is widespread anticipation that recovery is on the cards led mainly by the nearline product segment driven by the growth in hyperscale cloud demand to support rising data storage needs. We believe we are well-positioned to take advantage of this uptrend as we have aligned our long-term cost structure and manufacturing capacity in accordance with market dynamics,” he says.
“Meanwhile, we are very encouraged by the performance of our new PE Business. Despite being in operation for less than a year, it has started to generate some revenue contributions from a small group of customers that have completed qualification,” adds Tan.
In addition, BIG expects to establish a growing and diverse clientele in growth industries including the telecommunications equipment, industrial applications and automotive sectors across target markets such as South Korea, Vietnam, China, Europe and North America.
Shares in BIG closed unchanged at 8.7 cents on Feb 29.
