Avi-Tech reduces yearly losses by 53.7% to S$3.8m

US subsidiaries still led the bleeding.

Mainboard-listed Avi-Tech Electronics Limited (Avi-Tech) has achieved improved financial performance and trimmed its losses for the full year ended 30 June 2013 (FY13).

The improved performance is primarily attributed to Burn-In Board and Boards Related Manufacturing segment’s increased in sales to a key customer in the automotive industry. In addition, its Imaging Equipment and Energy Efficient Products segment reported an increase in sales due to the expansion of its products. Correspondingly, Group gross profit margin improved to 15.7% in FY13 from 10.1% in the full year ended 30 June 2012 (FY12). For FY13, Group revenue declined marginally by 2.9% to S$31.9 million while net loss narrowed 53.7% to S$3.8 million compared to S$8.2 million in FY12.

Mr EH Lim, CEO of AVi-Tech Electronics Ltd, said, “FY13 was a challenging year for the Group. Our two US subsidiaries (Imaging Equipment and Energy Efficient Products segment) contributed largely to the Group’s loss. However, we are optimistic of our progress as evidenced by the narrowing of the losses in FY13 compared with FY12. Our R&D investment over the last couple of years has started to bear fruits and we have since launched a number of new products. Going forward, we will aggressively intensify our marketing and sales activities to further improve this segment’s contribution.”

Aside from the losses incurred by the Imaging Equipment and Energy Efficient Products segment, the Burn-in Services business segment also reported significant losses after many years of profitability. This is due to a decrease in sales to a key customer which has undergone restructuring. The high fixed/ low variable cost nature of the Burn-in Services segment led to a sharp drop in profit margin as sales declined and the Group anticipated that this will continue to affect the gross margin of this business segment in the next 12 months.

Despite these and various risk factors associated with the uncertain outlook, the Group continued to report a healthy balance sheet and is cautiously optimistic of its long term growth prospects. As at 30 June 2013, the Group remains well-positioned with S$18.7 million in cash and short-term deposits and a healthy gearing ratio of 0.1 times.

Mr Lim added, “Technology is rapidly transforming and the rise of disruptive technologies such as the mobile-device segment will continue to reshape the semiconductor industry. Recognising the need for a more sustainable means of growth, Avi-Tech has in the last few years diversified into the Life Sciences Imaging Equipment and Energy Efficient Products segment and we will continue to push ahead with our business ventures.

“At the same time, we will continue to strengthen our existing operations through improving operational efficiencies, containing costs and raising productivity by taking advantage of government incentive schemes. During the year, we also focused on achieving operational excellence and Avi-Tech achieved EICC (Electronic Industry Citizenship Coalition) certification. This is a very important criteria for US MNCs when working with local companies to ensure that their suppliers align with industry standards adopted by top-tier electronics manufacturing services companies to create a socially responsible supply chain. Additionally, we were ranked 57th in the Business Times Governance and Transparency Index out of more than 600 publicly-listed companies which is a testament to our commitment to maintaining high standards of governance and business management. We are confident that Avi-Tech’s strong fundamentals, prudent financial management, lean cost structure and focused growth strategies will enable us to steer through the challenging times ahead and emerge stronger in the long run.”