SINGAPORE (Aug 14, 12:45 p.m. ET) — Sunningdale Tech Ltd. said business prospects remains challenging with on-going Europe's debt crisis, China's slow growth and the United States' slow economic recovery.
Pricing pressure from customers remains intense, coupled with significant increase in China labor costs continue to squeeze margins, said the Singapore-based company in its half yearly report.
Automotive business remains flat. Several old projects would come to end of life but would be replaced by several big newly won global projects which would start mass production in next one to two years, it assured shareholders.
Consumer/IT business also remains flat. One major customer has changed its supply strategy but strong orders from other existing customers and new customers have compensated for the gap, it disclosed.
Healthcare business remains the fastest growing segment. “Our Europe operations will start mass production towards end of 3Q for one of our customers that we currently serve in Asia,” said Sunningdale.
Tooling business orders have slowed down as one major customer has changed their supply chain strategy, coupled with weak export orders in automotive segment.
“Although there are many challenges ahead in the global business environment, the management remains confident due to strong business fundamentals that have been built over the years,” it said.
Sunningdale ended the first half of the year with a 36.7 percent improvement in profit attributable to owners to S$5.5 million (US$4.42 million or RMB28.1 million).
Sales increased by 10.4 percent to S$217.04 million (US$174.3 million or RMB1.11 billion) for the first half ended June 30.
The Q2 profit increased by 9.6 percent to S$2.2 million (US$1.77 million or RMB11.24 million) as sales rose by 4.7 percent to S$106.4 million (US$85.45 million RMB543.75 million).
The major contributors to Q2 earnings were the consumer/IT and healthcare business segments, partially offset by the mold fabrication business segment, it said.