Frencken Group profits up 62% to $6.6m in Q2
Sales from its semiconductor segment grew 51%.
Tech capital and equipment provider Frencken Group’s 2Q17 net profit increased 62% YoY to S$6.6m, driven mainly by a 51% YoY jump in sales from its semiconductor business segment.
According to a KGI review, revenue from its Mechatronics Division rose 20.5% YoY from $78.8m to $95m, brought in by higher sales of its semiconductor and analytical segments.
Meanwhile, revenue from its IMS (Integrated Manufacturing Services) division fell by 25.9% from $41.7m to $30.9m. The reduction in sales of the automotive segment following the disposal of Precico Electronics Sdn Bhd (PESB) pushed the revenue down.
"However, we note this is a positive move given that its IMS division has historically provided lower margins compared to its Mechatronics division. With a stronger balance sheet post-disposal of PESB, Frencken is well positioned to concentrate on growing its higher margin Mechatronics businesses," KGI said.
Gross margins improved 17.2% compared to last year's 15.2%. This was a result of improved capacity utilisation and shift of business to its Mechatronics division.
KGI also said Frencken Group has initiated efficiency and capacity measures in 2017. Its Mechatronics division, mainly for semiconductor, medical, analytical, and industrial, continues to improve. The IMS division, mainly Automotive, is working on a new manufacturing factory in Chuzhou, China.