JEP Holdings 1J4 0.00%   has reported earnings of $2.1 million for the 2HFY2022 ended Dec 31, 2022, 65.2% lower y-o-y. The earnings plunge was due to the slowdown in the global semiconductor industry during the 4QFY2022, says the group.

 

FY2022 earnings fell by 3.7% y-o-y to $7.6 million mainly due to foreign exchange (forex) losses arising from a weaker US dollar (USD) during the period.

 

Revenue for the FY2022 grew by 8.8% y-o-y to $82.6 million as most of the group&rsquo s segments saw revenue growth on a y-o-y basis. Only sales in the precision machining segment fell due to lower electronic component sales amid a slow recovery in the aviation sector. During the 2HFY2022, revenue fell by 18.2% y-o-y to $38.0 million as most segments saw revenue decline y-o-y and mitigated by the y-o-y growth in the trading and other segments revenue.

 

During the year, most of the group&rsquo s key markets expanded, with sales in Malaysia leading the growth. China and Canada, on the other hand, saw lower sales y-o-y.

 

Gross profit for FY2022 increased by 8.7% y-o-y to $16.5 million while gross profit for 2HFY2022 fell by 40.5% y-o-y to $6.6 million.

 

FY2022 other operating income fell by 62.7% y-o-y to $808,000 due to the lesser grant amount received and forex losses compared to forex gains in the year before.

 

FY2022 earnings per share (EPS) stood at 1.832 cents.

 

As at Dec 31, 2022, cash and bank balances stood at $23.8 million.

 

No dividend has been declared for the period.

 

Looking ahead, the group says it expects to see a more noticeable recovery of its aerospace business in the 2HFY2023 due to higher volume production of new complex and high value-added parts from its strategic customers.

 

However, the near-term outlook on the semiconductor industry is less buoyant with revenue expected to decline.

 

On its plans, the group says it will proceed with its production expansion plan and optimise its production mix to boost performance. Its new factory in Penang, Malaysia is scheduled for completion in the second half of 2023 which will enable it to take on more customer orders and increase production output.

 

&ldquo Moving forward, the group will continue to maximize operational synergies with UMS to improve overall performance and seek new business opportunities,&rdquo says the group.

 

On Apr 22, UMS Holdings : 558 0% increased its interests in JEP Holdings above 73.0 per cent, with 1,654,200 shares acquired at an average price of 37.9 cents per share.

 

With a consideration of S$626,231, this increased UMS Holdings&rsquo direct interest in the Catalist-listed stock from 72.92 per cent to 73.32 per cent.

 

According to UMS Holdings, last year JEP Holdings provided readily available manufacturing facilities in Singapore to support its strong customer order flows, alleviating the production challenges faced in the group&rsquo s Penang campus due to the manpower crunch in Malaysia during the year.

 

UMS Holdings began acquiring shares of JEP Holdings in January 2018, with a mandatory unconditional cash offer triggered last year, with a final offer price of 20.0 cents per share that closed with valid acceptances representing 71.66 per cent of JEP Holdings.

 

JEP Holdings is a leading solutions provider of precision machining and engineering services, with a primary focus on the aerospace industry. For its H2 FY21 (ended Dec 31), JEP Holdings achieved record revenue and profit over a 6-month period, with a pre-tax profit of S$9.5 million for its FY21 compared to S$1.0 million in FY20.

 

Executive chairman and CEO of both UMS Holdings and JEP Holdings, Andy Luong, has more than 20 years of experience in manufacturing front-end semiconductor components.

 

He recently noted that the current focus of JEP Holdings pivots towards the semiconductor equipment segment, while awaiting the recovery of its core aerospace component manufacturing business.

 

In FY21, the aerospace industry and equipment manufacturing respectively contributed 19 per cent and 37 per cent of JEP Holding&rsquo s revenue, compared to 47 per cent and 30 per cent in FY20, and 63 per cent and 17 per cent in FY19.

JEP Holdings has received a query from the Singapore Exchange Regulation (SGX RegCo) after shares in the company spiked some 4 cents or 10.67% to 41.5 cents on April 18.

 

The market regulator, at 3.16pm on the same day, issued a query to company to ask if it was in compliance with the listing rules.

 

SGX RegCo had also asked JEP Holdings to reveal any information that may have brought about the share price hike if any.

 

In its response at 7.14pm that day, JEP says it isn' t aware what might have caused the unusual trading and that it believes it is in compliance with the applicable rules.

 

JEP Holdings last received a query from SGX RegCo on its share price movements on April 21, 2021. At the time, the company explained that it had received an approach letter from UOB Kay Hian, on behalf of UMS Holdings, that the latter intended to purchase 54.23 million shares, or 13.10% of JEP&rsquo s entire share capital.