Comba Telecom Systems STC has announced earnings of HK$6.7 million ($1.1 million) for the FY2023 ended Dec 31, a 96.5% drop from its earnings of HK$190.2 million in FY2022.
As a result, FY2023 earnings per share for the telecommunications company, which is dual-listed on the Stock Exchange of Hong Kong (HKSE), decreased to 0.24 HK cents from 6.84 HK cents in FY2022
For the full-year period, Comba’s revenue was down by 6.0% y-o-y to HK$5.98 billion, while its cost of sales also decreased 3.8% to HK$4.32 billion compared to FY2022.
The company’s gross profit also slipped to $1.66 billion for FY2023, down from HK$1.87 billion in FY2022. Gross profit margin was down by 1.6 percentage points to 27.8% in FY2023 as competition in certain target markets intensified.
An increase in total operating expenses also contributed to the earnings slump. For FY2023, selling and distribution expenses increased by 3.1% y-o-y to HK$583.6 million while other expenses increased by 12.9% y-o-y to HK$207.2 million.
The increase in other expenses was mainly due to the increase in provision for receivables FY2023 as the group consistently adopted prudent operation and financial principles, which had no impact on its cash flows, according to Comba.
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In addition, Comba’s share of profits from a joint venture (JV) decreased to HK$626,000 in FY2023 from HK$5.8 million in FY2022.
Cash and cash equivalents stood at HK$1.18 billion as at Dec 31, 2023.
Given the group’s operating results for the financial year and considering its long-term future development, the board has not recommended a final dividend for FY2023.
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Comba paid out an interim dividend of 1.2 HK cents after disclosing its 1HFY2023 results, and a total dividend of 2.1 HK cents for FY2022.
Looking ahead, the company says that the global 5G industry is expected to continue to be in the stage of continuous growth and industry-integrated applications will enter into a crucial phase of large-scale development in 2024.
It notes that the advancement of the 5G-A network, coupled with the integration of AI applications, cloud computing and big data technologies, will provide strong support for new industrialisation. In turn, this will facilitate the dynamic growth of the industry ecosystem and promote the effective qualitative improvement and reasonable quantitative growth of the economy.
With the provision of scenario-based and highly cost-efficient product solutions as one of its core competitiveness, the company says it will be able to cater to diverse customer needs and seize the chance to create more business opportunities.
Shares in Comba closed unchanged at 9.4 cents on March 21.
