Achieva reports turnover jump of 42% to reach $482.2 million
March 13, 2002, Singapore — Mainboard-listed Achieva Limited (“Achieva” or “the Group”), one of the top Asia-Pacific knowledge-based, value-added distributors and IT solutions providers focusing on electronics and IT-related products, today reported that its group turnover rose 42% from $340.0 million to $482.2 million for the financial year (FY) ended December 31, 2001. The increase in turnover was driven mainly by improved sales in the PC peripherals, parts and software as well as the electronic components businesses. These two businesses accounted for 99% of the Group’s total turnover.
Operating profit before tax and interest however dipped 52% to $7.2 million in FY2001 from $14.8 million in the same period last year. The lower profit was attributed to the following factors:
– Lower margins due to deteriorating business conditions in the telecommunication and data
communication industry in the second half of FY2001;
– thinner margins necessitated by the need to increase market share in a highly competitive market;
– research and development (R&D) investments in the Strategic Technologies group.
Group EPS fell to 0.92 cents from 2.38 cents while net tangible asset backing per ordinary share increased to 12.03 cents from 11.63 cents. The Group maintains a healthy cash position – the Group’s cash reserves rose from S$20.6 million in FY00 to S$30.1 million in FY2001.
The year-on-year growth in turnover of the PC peripherals, parts and the electronic components businesses was 48% and 21% respectively. The growth in the PC peripherals business was mainly driven by a growth in the China market of S$81 million over the last financial year.
The electronic components business contributed the bulk of the Group’s earnings in FY2001. It registered an operating profit before tax and interest of $6.9 million in FY2001 compared to $8.3 million in FY2000. The second largest earnings contributor is its PC peripherals business which registered an operating profit before tax and interest of S$2.1 million, as compared to S$6.9 million in the previous year.
The lower profit contribution from the peripherals business was due primarily to oversupply issues, increased competition and pricing pressures leading to thin margins, expansion into China and infrastructure investments in this market.
Tighter cost control has also enabled the Group’s Data Networking business to turn in a profit of S$88,000 compared to a loss of S$462,000 in FY2000.
Achieva has also reported continued investments of S$1.4 million in NanoStorage under its Strategic Technologies business. However, the Group has indicated that there would not be any product launch this year. In terms of performance by geographical markets, percentage contributions from Achieva’s traditional core markets – Singapore, Australia and Malaysia – have declined but they continued to form the bulk of the Group’s sales, accounting for 23%, 23% and 22% respectively, of Group turnover.
Commented Mr Henry Lim, Achieva’s President and CEO, “Against extremely challenging market conditions caused by the global electronics doldrums, we have managed to deliver a set of credible results. In the last financial year, we have invested time and resources to prepare the groundwork for our strategic regional expansion. Our two key business groups – peripherals and electronic components businesses – have expanded into the vast China market. As China is expected to continue its vibrant annual GDP growth rates of between 7 – 8%, demand for IT and electronic products will grow further in the next few years. In China, we have established a direct presence in more than 13 cities and more than 1,500 separate channels of distribution, including links with key government channels and state enterprises. With such a strong network firmly in place in China and its continued robust demand for technology products and services, we expect this market to be a major growth driver for the Group in the years ahead.”
“Prospects in the first half of FY2002 continue to be challenging as visibility for the electronics sector remains uncertain. However, we are cautiously optimistic as the outlook is likely to improve by the second half of FY2002 due to the recovery of the US economy and improved business sentiment worldwide. Going forward, we will continue to deliver knowledge-based, value-added products and services to our growing portfolio of blue-chip customers and persist in our expansion efforts in high-growth markets in North Asia — which includes China, Taiwan and Hong Kong — and West Asia. We will also stay focused on prudent management of inventory and costs while enhancing core competencies to provide better returns to our shareholders over the long term,” he added.
Achieva Limited is one of Asia Pacific’s top knowledge-based value-added distributors and solutions providers focusing on electronics and IT-related products and services. It is focused on knowledge-enhancement and has scaled up the value chain by offering more knowledge-based products and service offerings, including the design and development of proprietary products and technology that offer breakthrough solutions for its customers.
In line with its strategy of scaling up the value chain beyond the role of a traditional box mover, Achieva has also built up its own design and development competencies and a growing portfolio of proprietary patents and intellectual property rights.
With corporate headquarters in Singapore and its operations spanning the Asia-Pacific region, the Achieva Group represents in excess of 40 product brands. Currently, the Group has four operating subsidiaries and a staff strength of about 300, serving a growing customer base of about 8000 in the Asia-Pacific region.