| Latest Forum Topics / Sunningdale Tech |
 Post Reply
|
|
Weak year
|
|
|
singaporegal
Supreme |
31-Aug-2006 20:43
Yells: "Female TA nut" |
|
x 0
x 0 Alert Admin |
Inconsistent volume over the last 3 months. Only woken up now. |
| Useful To Me Not Useful To Me | |
|
Nostradamus
Supreme |
31-Aug-2006 12:59
|
|
x 0
x 0 Alert Admin |
It expects weaker sales this year compared to last year as the industry struggles with overcapacity but the company is working at improving its profit margins by realigning production capacity and restructing its operations. The manufacturer of plastic components for the electronics industry saw sales in the first half to June slip 1.7% yoy while net profit in the period slumped 85.3%, hit by increased raw material costs particularly for oil and resin. "Year on year in terms of sales, performance in the full year may be more reflective of the first half," Sunningdale Tech's executive chairman Koh Boon Hwee said in an interview with XFN-Asia. While not disclosing their earnings expectations for the year, Koh said Sunningdale is looking to increase its gross profit margin to 20% for the full year by restructuring its operations. Thus far, this has included a redeployment of excess production capacity from its telecommunications-related business to its automotive and consumer/IT segments. He said Sunningdale's Shanghai manufacturing plants for the automotive segment and those in southern China for its consumer/IT segment are running at full capacity, although overall group capacity utilization is at about 50-60%. "Plant utilization is expected to get better as the year progresses," he said. The company has also moved its Singapore production to lower-cost locations such as Bintan in Indonesia. "Singapore will be the business development hub and our operations there will concentrate on higher value activities such as design, engineering and marketing," Koh said. "The alignment of our capacity would probably be done by the end of the first quarter next year, and the full conversion of some of these activities probably completed by the second or third quarter." Sunningdale expects to generate cost savings of "a few million dollars a year" as a result of the restructuring, Koh said. Profit margins will also be driven by stronger growth in its automotive and consumer/IT businesses which contribute about 25% and 40% to group revenue respectively, Koh added. "We are spending a lot of time on process engineering and tooling engineering, to be able to design better and faster than the competition," he said. Once restructuring is completed, the company should reap the benefits when the industry turns around, he said. "From my perspective, the industry is close to the bottom, if not at the bottom. I am quite confident things should improve going forward." |
| Useful To Me Not Useful To Me | |