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10 Things to Know About Micro-Mechanics (Holdings) Ltd’s Latest Earnings

Today, Micro-Mechanics (Holdings) Ltd (SGX: 5DD) announced its financial results for the first quarter ended 30 September 2017 (1Q2018). The reporting period was from 1 July 2017 to 30 September 2017.

Here are 10 things investors should know from the earnings announcement:

1. Revenue for 1Q2018 surged 32.5% year-on-year to a record S$17.7 million. The rise was due to “higher demand from customers across the Group’s key geographical markets”.

2. Gross profit margin for the quarter increased to 60.9% versus 57.3% a year ago. The excellent showing was mainly due to an increase in capacity utilisation, as well as cost, productivity and cycle time improvements across its worldwide manufacturing operations.

3. Net profit for the quarter was S$5.2 million, a massive 53% year-on-year jump.

4. The net profit margin for the latest quarter improved to 29.2% as compared to 25.3% one year ago.

5. Diluted earnings per share for the reporting quarter was up 53.1% year-on-year to 3.72 cents.

6. As of 30 September 2017, there was S$25.4 million in cash on the balance sheet and no debt. This an improvement from 30 June 2017 when there was S$23.4 million in cash and zero debt.

7. Operating cash flow for the reporting quarter was up 1.9% year-on-year to S$4.4 million.

8. Due to an increase in capital expenditure from around S$890,000 last year to S$2.2 million in 1Q2018, Micro-Mechanics’ free cash flow for the quarter came down 35% from S$3.4 million to S$2.2 million.

9. For the whole of Financial Year 2018 (FY2018), the firm expects to spend around S$10 million in capital expenditure. For context, it spent S$5.1 million in capital expenditure in FY2017.

10. Looking ahead, Micro-Mechanics’ chief executive, Chris Borch said, “We believe the semiconductor industry’s robust growth this year may herald a prolonged period of strong growth as chips are being increasingly used in nearly every aspect of our daily life. To sustain the Group’s growth over the long term, we will continue to focus on our customers and the value we bring to their businesses”.

At the current share price of S$2.02 (at 4:55 pm), Micro-Mechanics has a trailing price-to-earnings ratio of 17 and a trailing dividend yield of 4%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Micro-Mechanics (Holdings) Ltd. Motley Fool Singapore contributor Sudhan P owns shares of Micro-Mechanics (Holdings) Ltd.