Broadway Industrial Group, the manufacturer of precision-machined components and engineered foam plastic solutions provider, said it posted earnings of $5.8 million for the three months ended 30 June 2012 (2Q2012), a 55% increase from a year ago (2Q2011).
This was because the group recorded other income of $3.4 million in 2Q2012 which were due to change in fair value of its financial derivatives as well as gain on disposal of other investments.
Revenue increased 20.6% to $173.5 million due to strong contributions from the HDD business. Gross profit was flat at $17.7 million as gross profit margin decreased to 10.2% in 2Q2012 from 12.7% in 2Q2011. The decrease in gross profit margin was mainly due to higher ramp up costs and an increase in minimum wage in China across the various business units.
Sales from the HDD business grew 32.3% to $120.4 million in 2Q2012 from $91.0 in 2Q2011 on higher shipments of actuator arms to existing clients as HDD Original Equipment Manufacturers (OEM) continued to ramp up their production after the Thai’s flood crisis.
Sales in the non-HDD business declined 10.4% to S$12.1 million in 2Q2012 from $13.5 million in 2Q2011 due to a slowdown in the semiconductor industry. Profit before tax was lower at S$0.6 million in 2Q2012 as compared to S$1.0 million in 2Q2011 due to higher labour and lower sales performance.
Sales from the foam plastics division rose 4.2% to $41.0 million in 2Q2012 as compared to $39.3 million in 2Q2011 due to better sales performance from the protective packaging and automotive component business.
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