Fu Yu Corporation F13 has reported a net loss of $3.9 million for the 1HFY2023 ended June 30, down from its earnings of $10.9 million for the 1HFY2022.
The net loss was attributed to slower demand and higher operating costs from labour and energy as well as expenses from its business developments.
Revenue for the six-month period fell by 41.5% y-o-y to $71.2 million due to sluggish business activities for the company’s manufacturing and supply chain management segments amid weak economic growth, prolonged geopolitical tensions and a higher interest rate environment.
Revenue for Fu Yu’s manufacturing business fell by 26.9% y-o-y to $52.6 million amid China’s slower-than-expected economic recovery. Sales in Singapore and Malaysia also eased.
In the 1HFY2023, gross profit fell by 69.6% y-o-y to $6.4 million while gross profit margin stood at 9.0%, nearly half of the 17.3% in the 1HFY2022.
Loss per share stood at 0.51 cents on a fully diluted basis.
Cash and cash equivalents as at June 30 stood at $60.5 million.
The group says it remains “cautiously optimistic” that its order flow will remain “healthy” looking ahead. It has also initiated several strategies for business transformation and long-term growth including diversifying its customer base and moving up the value chain to provide higher-precision products.
“Despite macroeconomic headwinds, we continue to see new business opportunities, and have been investing to enhance our capabilities and capture markets which offer higher margins. Hence, our financial performance for 1HFY2023 has to be seen under the lens of our ongoing transformation,” says David Seow, Fu Yu’s group CEO.
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“Looking ahead, we are focused on growing our customer base while maintaining a lean cost structure, in anticipation of a challenging operating environment. The group is finalising its Smart Factory, which we expect to fully launch by the first quarter of 2024. Featuring Industry 4.0 capabilities and improved automation, the facility will enable Fu Yu to grow our lead as one of Asia’s largest high-precision plastic parts manufacturer, in turn adding value to shareholders as well as our business partners,” he adds.
Shares in Fu Yu closed 0.4 cents lower or 2.5% down at 15.6 cents on Aug 10.
