BATTERY maker bounced back into the black with a 62.9 per cent jump in net profit in its first half of FY2025, driven by revenue growth and tighter cost control measures imposed after the red ink spilled in H2 2024.
The mainboard-listed company posted on Wednesday (Nov 13) a net profit of S$14.5 million in H1 ended Sep 30, up from S$8.9 million in H1 of FY2024.
Revenue grew 1.1 per cent to S$570.5 million from S$564.2 million in the year prior. The S$6.3 million rise came mainly from a 0.6 per cent increase in revenue in its battery business, which contributed about three-quarters (77.4 per cent) of the revenue in the period.
The audio business, which accounted for the remaining 22.6 per cent of revenue, rose 3 per cent, which also helped lift the group’s revenue.
The company declared an interim dividend of S$0.015 per share, up from S$0.01 in the year-ago period. It will be paid on a date to be announced later, said the statement.
Additionally, GP Industries said it improved its factory efficiency, implemented strict cost control measures and monitored the optimal level and timing of its commodities purchases during the period.
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This enabled it to grow its gross profit margin, it said.
In the battery business, improvement in factory efficiency and product mix lifted margins. Gross profit margin of the audio business was mainly boosted by the increase in branded acoustics products, which had higher margins.
While distribution costs rose S$2 million, largely due to higher worldwide shipping costs, it was supported by the increased sales volume in the same period.
The group said it has enhanced operational efficiency and controlled costs since the first half of FY2024, and has kept administrative expenses at about the same level.
The rise in operating expenses was attributed mainly to property, plant and equipment write-offs, related to the upgrading of some aged production lines in its battery business.
Finance costs fell mainly due to the group’s repayment of bank borrowings.
In geographical terms, sales to the Americas grew 32.3 per cent, and that to Asia grew by 4.8 per cent. Sales to Europe decreased by 24.5 per cent, said the group in the regulatory filing.
Earnings per share rose to S$0.0299, up from S$0.0184 the previous year.
On Sep 30, GP Industries entered into subscription agreements with certain investors for the issue of fixed-rate resetting perpetual subordinated bonds up to an aggregate principal amount of US$11 million (S$14.1 million).
Incremental costs directly attributable to the issuance of the perps incurred, amounting to S$77,000, were recognised in equity, and deducted against the principal amount.
The distribution rate on the perps is at 9.5 per cent per annum for the first year, and 8.5 per cent for the second; thereafter, it will reset annually.
As at Sep 30, the company had received proceeds of US$2.5 million from the perps issuance.
The bond issuance has enabled the group to strengthen its capital base, said the group.
It also intends to speed up the divestment of vacant land and buildings of its unused factories in China, and generate rental income before the completion of the disposal, which it said would beef up its net asset position.
GP Industries expects interest rates to remain high throughout the year ending Mar 31, 2025; it may hence explore funding some of its future expansions by other financing sources to reduce its bank borrowing and finance costs.
The group anticipates demand for its battery products to remain stable as major overseas customers’ demand has stabilised, following the ongoing inventory optimisation processes.
GP Industries shares ended Wednesday at S$0.49, down S$0.01 or 2 per cent before the announcement.
