CDW Holding has reported a loss of US$1.07 mil for its FY2023 compared to the earnings of US$14.4 million in the preceding year.
Revenue was down 26.2% y-o-y to US$109.2 million. This was largely due to the combination of lower demand for its LCD Backlight Units segment, the restructuring of portfolio for its office automation segment as well as delay in the mass production of a major new product model from its OEM and accessories segment.
Additionally, demand was softened by the ongoing US-China trade tensions, including the “China Plus One” phenomenon where manufacturers are increasingly looking to alternative sites outside of China for manufacturing. All these led to a reduction in demand for the company’s products which are part of the larger supply chain.
In line with the lower revenue, gross profit declined by 27.1% y-o-y to US$18.7 million.
FY2023 expenses were 11.5% lower y-o-y at US$19.8 million on decrease in freight and storage costs and decrease in staff costs as well as related expenses.
Looking ahead, CDW is cognisant of its operating challenges and is forging ahead to strengthen its core business segments and build up a diversified range of businesses. A key strategy in addressing the challenges of higher labour costs and recruitment difficulties in China is automation, which the company has been adopting at its various production facilities.
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The company seeks to further automate its production processes where feasible, while also exploring possible solutions such as reusing and recycling in order to reduce the amount of packaging used, which would translate into cost savings.
CDW does not believe there are any going concern issues and continues to maintain a healthy financial position and liquidity.
Shares in CDW closed 0.1 cent lower or 0.5% down on Feb 29 at 18.9 cents.
