Trek turns in S$7.1 million post tax profits despite economic slowdown

Engineering Solutions Provider, Trek 2000 International Ltd ("Trek" or "the Group") today announced a post tax net profit of $7.1 million on the back of $98.1 million revenue despite the global economic slow down in FY 2001.

"We are very pleased to report that the Group remains profitable despite the tough operating conditions, especially considering the events of September 11 last year. While it was not an easy year for all of us but our business model coupled with the dedication of our employees and with the strong support from our customers, we are in a good position to withstand this test." Said Mr Henn Tan, CEO and Chairman of Trek.

Despite the lower revenue which declined approximately 29% from $138.3 million to $98.1 million in FY 2001, gross profit margins were higher in FY2001 as a results of higher contribution in the Group's turnover by Digital Technology. Traditionally, operating margins from Digital Technology is better compared to Customized Engineering, the other core business of Trek.

Post tax net profit was marginally lower by 9%. In FY 2001, the post tax net profit was $7.1 million compared to $7.9 million in the previous year. This year also saw a dilution in the Group's operating margin due to expenses incurred in the establishment and promotion of subsidiary companies in the US, Hong Kong and an additional liaison office in India. Furthermore, to balance the lower market demand due to the economic slowdown across the different markets, the Group stepped up its marketing efforts and hence more economic resources were allocated to support this drive.

By segmental analysis, revenue from Customized Engineering was lower by 39% while Digital Technology performed better with a 5% increase in its revenue contribution to the Group.

The Board of Directors is pleased to recommend a first and final dividend of 20% less tax.

Commenting on the Group's future prospects, Mr Henn Tan said, "looking ahead, we remain cautiously optimistic about the outlook for FY 2002. However, we will take this opportunity to further expand our geographic footprints into countries like China, the Philippines, France and Netherlands. More importantly, as we continue to derive new engineering solutions, we expect to increase the number of patents that we register internationally in FY 2002. The management will continue to look out for new opportunities that may be available for us to develop and form strategic and synergistic business partnerships."

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