MICRO-MECHANICS on Friday reported a 45.5 per cent rise in its net profit to about S$3.9 million for its fourth fiscal quarter ended June 30, from S$2.7 million in the year-ago period.

 

Strong revenue growth gave a boost to its bottom line, said the mainboard-listed company, which manufactures high-precision tools and parts used in process-critical applications for the semiconductor industry.

 

Revenue increased 17.5 per cent year on year to S$16.4 million for the fourth quarter, from S$13.9 million previously.

 

The group' s sales improved across most of its markets, with the exception of Malaysia and Europe, reflecting the resilience of the chip industry amid the coronavirus pandemic, Micro-Mechanics said.

 

China remained its largest market, making up 29 per cent of group revenue, and its sales were up by 28 per cent to S$5.2 million for the quarter.

 

For the full year to June 30, net profit was up 13.1 per cent to about S$14.7 million, while revenue rose 6.4 per cent to S$64.2 million.

 

Higher sales from the Singapore, China, US and Taiwan markets were partially offset by lower sales contributions from Malaysia, Europe and the Philippines.

 

Earnings per share was 10.54 Singapore cents for the year, up from 9.31 cents in FY2019.

 

A final dividend of S$0.05 per share and a special dividend of S$0.02 per share have been recommended. This will raise the group' s total dividend payout for FY2020 by 20 per cent to S$0.12 per share, from S$0.10 per share in the previous fiscal year.

 

If the dividend is approved by shareholders at the Oct 30 annual general meeting, it will be paid on Nov 19.

 

Although global chip sales are expected to increase this year, it remained difficult to accurately assess the impact of the Covid-19 outbreak on Micro-Mechanics' business in FY2021, the group said.

 

" While demand for the high-precision parts and tools that we supply to the semiconductor industry was surprisingly resilient in Q4 FY2020, there is still plenty to worry about due to rapidly changing market conditions, continuing Covid-19 containment measures&hellip travel restrictions and the possibility of future enforced factory shutdowns," said Chris Borch, chief executive of Micro-Mechanics.

 

That being said, in the long term, the group believes the semiconductor industry is poised for a prolonged period of solid growth as chips become increasingly embedded in nearly every aspect of modern life, he added.