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Aztech Back In The Black

Aztech Limited (SGX: 560) released its financial results for the third quarter (3Q2013) and nine-months ended 30 September 2013 (9M2013) after markets close yesterday. Listed on SGX in 1994, Aztech Systems Ltd core businesses encompass 3 business segments: Electronics, Materials Supply & Marine Logistics.

aztech

The company started out by designing and manufacturing of data & voice communications electronics products under Original Equipment/Design Manufacturing (OEM/ODM), and provideing electronics manufacturing services to customers. Today, Aztech has developed its own product line under “Aztech” brand, and distributes to 36 countries worldwide.

As part of its diversification plan, the company set up Az United in 2008 to procure and supply construction materials for the building construction industry and infrastructure projects supply of construction materials. Subsequently, AZ Marine Pte Ltd was formed to provide the complementary marine logistics support, as well for external chartering of offshore vessels. The group of companies is also involved in the design and manufacture of eco-friendly LED lighting products with the set up of AZ e-lite.

For the period of 3Q 2013, the Group recorded an impressive 48.1% growth in revenue from S$45.15 million to S$66.86 million, mainly attributed to higher sales contribution from the Electronics and Materials Supply business segments.

The Group’s gross profit margin saw an improvement from 5.1% in 3Q2012 to 13.6% in 3Q2013, mainly due to the sustained improvement in product mix offering, operational efficiency and sourcing strategy.

The strong top-line growth trickled down to the net profits, where the group managed to reverse their 3Q S$2.3 million losses from last year to S$2.44 million this year. As a result, the net earnings per share (EPS) improved from a loss of 0.47 cents to earnings of 0.50 cents. As for 9M2013, the Group registered net profit of S$3.42 million on revenue of S$158.02 million, a stellar 12,125% jump as compared to S$0.028 million last year.

One highlight was that “other operating income” was significantly lower at S$0.19 million in 3Q2013, mainly due to the decrease in rental income with the expiry of the lease back arrangement of the head office building and the absence of exchange gain recorded for the same period in 3Q2012.

As at 30 September 2013, the group’s current ratio and net debt to equity ratio stands at 1.28 and 26.5%, a stark improvement against 1.34 and 14.7% in 31 Dec 2012 respectively.

Based on the Aztech’s share price of S$0.104 as of 23th Oct, it is trading at a P/E ratio of 14.05 trailing twelve months earnings. Its net tangible assets per share have improved from 15.13 cents to 16.06 cents. No dividends were paid for the quarter; while the last dividend payout was in FY2011.

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