Fu Yu Corporation (F13) H1 2023 earnings summary

Executive summary

• 1H23 revenue fell 41.5% YoY to S$71.188m amid weaker demand; results shifted to a $3.854m net loss from $10.935m net profit in 1H22.

• Transformation priorities include higher-precision manufacturing, engineering capabilities, Smart Factory investment and entry into biomedical markets.

Financial highlights

• Revenue fell 41.5% YoY to $71.188m; gross profit declined 69.6% to $6.383m, and operating activities recorded a $3.767m loss versus $13.371m income in 1H22.

• Basic and diluted EPS was (0.51) cents versus 1.45 cents in 1H22; tax credit was $188k versus tax expense of $2.294m, mainly from tax benefits recognized for use when subsidiaries return to taxable income.

• Other income rose to $2.1m from $1.0m; selling and administrative expenses increased 24.3% to $12.7m, while other operating income fell to $0.5m from $1.6m.

• Lower revenue, higher labour and energy costs, and Smart Factory and engineering investment expenses contributed to the loss.

Outlook and guidance

• Cautiously optimistic on long-term growth and order flow, while anticipating challenging conditions; focus remains on customer growth, healthy order flow and a lean cost structure.

• Smart Factory launch is expected by Q1 2024; Industry 4.0 capabilities and automation are intended to support higher-precision manufacturing.

• Fu Yu Biomedical is pursuing medical technology and biotechnology customers for endoscopes, vials, syringes and in-vitro diagnostics, with a medium- to long-term revenue contribution expected.

• Supply chain solutions is piloting centralized resin procurement at China factories and working with Asia Pacific commodity supply and trading partners to grow the business.