Spindex Industries 564 has reported a net profit of $6.3 million for its 1HFY2024 ended Dec 31, 2023, a 4.7% y-o-y improvement, on increased gross profit and a lower effective tax rate.
Amid market conditions which remained challenging, the company’s revenue contracted by 6.3% y-o-y to $88.2 million in 1HFY2024 compared to the previous corresponding period. The company’s business segments recorded mixed performances as overall demand continued to remain soft.
Cost of sales fell by a similar margin of 9.3% to $70.9 million in 1HFY2024, as distribution, selling and administrative expenses were carefully managed in line with the lower revenue.
Spindex says it was able to lift its gross profit margin from 16.9% in 1HFY2023 to 19.6% in 1HFY2024 through prudent and careful management of input costs. Gross profit also increased 8.3% y-o-y to $17.3 million.
During the half-year period ended December, the company’s repayment of bank borrowings resulted in lower financial expenses. Continuous improvement in the performance of the plastic injection operations in Vietnam enabled a modest positive contribution from this joint venture.
In addition, the reversal of deferred tax liability from an overseas subsidiary enabled the company to lower its effective tax rate to 19%.
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For the 1HFY2024, Spindex’s net cash flow from operating activities stood at $8.4 million, while cash and cash equivalents came in at $50.7 million. Meanwhile, loans and borrowings lowered to $3.0 million as at Dec 31, 2023.
In its outlook statement, Spindex expects the cautious and uncertain business environment to continue for the rest of the current financial year. High interest rates and continuing inflationary pressures will add to these challenges, further dampening demand from consumers and businesses in the near term.
The company says it will continue to be conservative in managing its cash position, but will invest in equipment, work processes and its human capital to achieve developments in its core competencies to reposition for growth.
Shares in Spindex closed 3.5 cents higher or 4.52% up at 81 cents on Feb 6.
