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10 Things Investors Should Know About Hi-P International Ltd’s Latest Earnings

Hi-P International Ltd (SGX: H17) is an integrated contract manufacturer that provides a one-stop solution for customers from various industries such as telecommunications, consumer electronics, computing and peripherals.

Yesterday, the firm released its financial results for the third-quarter and nine months ended 30 September 2017.

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

1. Revenue for the quarter rose 6.2% year-on-year to S$411.3 million.

2. Gross profit increased by 24.7% to S$68.1 million. This was mainly due to the increase in revenue, change in product mix, continuous improvement in operational efficiency, which were partially offset by higher direct labour costs.

3. As a result, gross profit margin expanded to 16.5% for the quarter from 14.1% a year ago.

4. Net profit for the period grew 24.9% to S$38.4 million, setting a new quarterly record.

5. Diluted earnings per share for the quarter was at 4.74 Singapore cents, up from 3.76 cents one year back.

6. The balance sheet strengthened for the latest period. As of 30 September 2017, the firm had a net cash position of S$36.9 million as compared to the end of last year’s figure of S$25.1 million.

7. Cash flow from operations was at S$37 million and S$5.3 million was spent on capital expenditure. Therefore, Hi-P brought in around S$32 million in free cash flow for the latest quarter, a decline from approximately S$41 million raked in a year ago.

8. For the nine-month period, revenue slipped 1.4% year-on-year to S$935 million, but net profit surged 138.1% to S$61.9 million.

9. The firm’s board of directors has recommended an interim dividend of 2.0 Singapore cents per share for the third-quarter. In comparison, during the same period last year, only 0.4 Singapore cent was dished out.

10. As for the earnings outlook, the contract manufacturer said that it expects higher revenue and profit for the 2017 financial year as compared to the preceding fiscal year.

Hi-P International Ltd’s shares are now changing hands at S$1.97. This translates to a trailing price-to-earnings ratio of 18 and a trailing dividend yield of 10.7%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.