BOE Varitronix (710) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 rose 18% year-over-year to HK$6,157 million, driven by strong growth in automotive display and system products, especially for NEV customers.

• EBITDA decreased 3% to HK$315 million, with margin dropping to 5.1% from 6.2% year-over-year.

• Profit attributable to shareholders fell 15% to HK$172.1 million, mainly due to lower government grants, exchange gains, and increased costs.

• The Group maintained a robust net cash position, with cash resources of HK$3,944 million and a gearing ratio of 13.7%.

• No interim dividend declared for H1 2024; dividend policy remains unchanged.

Financial highlights

• Revenue: HK$6,157 million (+18% YoY); EBITDA: HK$315 million (-3% YoY, margin 5.1%); Net profit: HK$172.1 million (-15% YoY).

• Basic EPS: 21.9 HK cents (2023: 25.8 HK cents); Operating cash inflow: HK$795 million (2023: outflow of HK$380 million).

• Cash and fixed deposits: HK$3,496 million; Bank loans: HK$607 million (down 2% from end-2023).

Outlook and guidance

• Automotive display business remains the core focus, with ample growth opportunities in smart cockpit and NEV segments.

• The Group plans to enhance R&D, production, and customer service, and is considering overseas production facilities to support global expansion.

• Industry consolidation and price competition are expected to intensify, favoring leading players.

• Industrial display business maintains profitability but faces lower demand.

• Cautious on business with emerging automotive startups; focus on cost management and supporting leading players.