The financial year ended 30 June 2022 (“FY2022”) went through a global economy grappling with the supply chain disruptions and persistently high inflation amidst the ongoing Russia-Ukraine conflict. Despite these macroeconomic headwinds, the Group has been resolute in its efforts to invest decisively to benefit from the first mover advantage in digitalisation and improve productivity to adapt and thrive in the new normal. We have pivoted through the pandemic by enhancing our capabilities to perform last-mile manufacturing in our new product offerings and leveraged on our business network to build new distribution channels through our e-commerce platform.
One of the silver linings to emerge from the challenging landscape is the heightened emphasis on environmental sustainability to combat climate change. The Group will continue to pursue business opportunities that may arise in the green economy given the robust demand for digital infrastructure like data centres and burgeoning growth of the electric vehicle ecosystem.
As we evolve from a cable manufacturer into an integrated power distribution solution provider, the Group is confident that these strategic initiatives will serve as the springboard to propel us into the next phase of sustainable growth.
Group revenue increased 27.01% from $298.44 million in the financial year ended 30 June 2021 (“FY2021”) to $379.05 million in the year under review higher contributions from the Cable & Wire (“C&W”) and Electrical Material Distribution (“EMD”) segments offset by marginal decline in revenue from the Testing & Inspection (“T&I”) and Switchboard (“SB”) segments. The stronger performance was underpinned by the expansion in both public and private sector construction activities, easing of border restrictions as well as the sustained global demand for semiconductors and semiconductor equipment. The tailwinds from these sectors cushioned the impact of tapered growth due to the delay in completion of existing and new contracts in Singapore, Malaysia and Indonesia. Gross profit almost doubled from $41.37 million in the previous financial year to $80.05 million in FY2022.
Gross profit margin correspondingly improved from 13.86% to 21.12%. This was mainly due to the reversal of provision for onerous contracts, offset partially by deliveries of lower margin projects that were secured two to four years ago when copper prices were lower.
Other operating income decreased to $4.34 million mainly due to the absence
of fair value gain on derivative financial instruments recorded in “FY2021” and lower government grants recognised during the year under review.
Selling and distribution expenses increased to $21.79 million due to higher staff costs and business operation costs, which moved in tandem with higher revenue. Administrative expenses also rose to $20.44 million mainly due to higher directors’ remuneration and staff costs as well as higher operating costs incurred for the new Cambodia business.
For the year under review, other operating expenses increased to $14.91 million mainly due to fair value loss on derivative financial instruments and higher loss allowance for trade and other receivables.
Finance costs increased to $1.05 million mainly due to higher interest on lease liabilities and higher interest charges from short-term bank borrowings.
Share of profit of associates improved to $1.08 million during the year under review.
As a result of the above, the Group’s profit attributable to shareholders increased to $22.01 million in FY2022.
To appreciate our shareholders for your unwavering support, the Board is pleased to recommend a final dividend of 1.60 cent per ordinary share. Subject to shareholders’ approval at our upcoming annual general meeting scheduled on 31 October 2022, the dividend is expected to be paid out to shareholders on 15 November 2022. This will bring the total cash dividend payout for FY2022 to 2.35 cent per ordinary share.
Finally, I would like to take this opportunity to thank our customers, business partners and shareholders for their faith and confidence in us. I am also deeply appreciative of our management team and staff for their continued dedication and invaluable contributions during the year. I believe that the strategic initiatives which we have undertaken will deliver long-term value to our shareholders.
On behalf of the Board of Directors, we thank you and look forward to your continued support.
Bobby Lim Chye Huat