- Revenue totalled $158.0 million
- Net profit after tax attributable to shareholders totalled $4.2 million
- Group has strong cash flow and healthy balance sheet
- Recommends final dividend of 0.8 cents per share
SINGAPORE,
20 February 2009 -
Main board listed Teckwah Industrial Corporation Limited (“Teckwah” or “the Group”)
today announced revenues of
$158.0 million and net profit after tax attributable to shareholders of $4.2 million for the financial year ended 31 December 2008 (“FY08”).
To reward shareholders, the Board recommends a final dividend of 0.8 cents per share, subject to the approval of the shareholders at the forthcoming Annual General Meeting.
At the close of FY08, the Group has $28.1 million in cash and cash equivalents and operating activities generated positive cash inflows amounting to $12.0 million. The Group’s balance sheet remains healthy and with its low reliance on bank borrowings, it continues to operate with a very low gearing of 0.02 times. Prudent management at Teckwah has also ensured that capital expenditures are contained and investments decisions are carefully evaluated. The Group is well positioned to weather the current economic crisis.
Similar to trends in previous years, the Group’s performance in the second half of the year was better than that of the first six months of FY08. However, business for the full financial year was weaker as revenue remained relatively flat compared to the previous financial year (“FY07”). The Group’s profit margin was also lower due to high energy and raw materials costs during the year. A $1.1 million additional and final provision for impairment of goodwill for its Australia operation which turned in weak performance in FY08 has also impacted the Group’s bottomline. Both the Print-related and Non-print related operations reported lower profit.
Geographically, Singapore continues to be the key contributor for Teckwah. The China market also turned in encouraging performance, in particular from its flexible packaging business. This particular business segment, which caters largely to the food and beverage industry, is fuelled largely by domestic consumer demand in China.
Total operating expenses amounted to $39.5 million. The increase in operating expenses is primarily due to the impact of the full year rental of the Group’s additional floor space in TIC Tech Centre building. The year also saw lower foreign exchanges losses, which amounted to $0.5 million compared to $0.8million reported in the previous financial year.
Going forward, the Group expects that the business environment will become increasingly difficult in view of the global financial crisis and poor consumer confidence. There will be weakening demand from global IT’s companies whose customers worldwide are expected to cut IT spendings. Within the organisation, it has taken steps to reduce management’s salaries and freeze staff’s wages for the year and will continue to look for ways to improve its operating and cost efficiencies. The recent economic stimulus package from the Singapore government, including the job credit scheme, will benefit the Group in the new financial year.
Notwithstanding the tough economic outlook, the Group is committed to continually improve and upgrade the quality of its human capital. It will therefore continue to focus and invest in employee training across all levels. This corresponds with Teckwah’s strategy to transform and orientate itself into a service-focused organisation.
Commenting on the outlook for Teckwah into the new financial year, Mr Thomas Chua, Chairman and Managing Director said: “In line with our aim to continually strengthen the structure of Teckwah, we will be looking to improve our efficiency and search for new areas of competencies that can enhance our current operations. At the same time, we are on the look out for strategic alliances or business acquisitions that are complementary to our business. We expect that these opportunities may emerge as the global economic consolidation continues into the rest of this year.” |
