Nera Telecommunications 1Q earnings down 39.2% to $1.74 mil

This was due to both lower turnover reported from the group’s Network Infrastructure and Wireless Infrastructure Network business segments. The decrease in turnover was largely due to the delay in project completion.

With a 5.5% y-o-y decrease in cost of sales to $31.0 million, the group’s 1Q18 gross profit came in at $10.6 million, 6.2% lower than $11.3 million a year ago.

This represents a 0.2 percentage point decrease in gross margin to 25.5% compared to 25.7% in the previous year.

Other operating income dropped 74.1% to $0.10 million compared to $0.38 million last year. Higher other operating income in 1Q17 was largely due to income generated from services rendered to Ingenico to facilitate a smooth transition after the divestiture of the Payment Solutions business.

Other operating expenses increased by 55.6% to $1.31 million from $0.84 million a year ago, due to higher foreign exchange loss from the devaluation of USD against the SGD and EUR. In addition, there was also foreign exchange loss arising from revaluation of USD payables due to the strengthening of the USD against Philippine Peso.

Beck Tong Hong, CEO of NeraTel says, “While we’ve started to see traction from the new growth verticals we have identified within the NI segment, as with any new business venture, a gestation period is required before these new areas start contributing meaningfully. In the meantime, we’ll continue to leverage our vertically-integrated value chain to provide end-to-end solutions to our customers, while encouraging customers to take on service and maintenance contracts, which will offer higher margins and strengthen our recurring income for sustainable long-term growth.”

Shares in NeraTel closed at 34 cents on Thursday.