Group's overall gains jump to $58.9m despite sales rising only 7% to $2.1b
A STARTLING turnaround in investment returns helped multiply profit at WBL Corp by more than seven times to $58.9 million for the year ended Sept 30.
Turnover at the diversified group rose by a more modest 7 per cent to $2.1 billion.
While all other segments posted weaker performances, the group's investments recorded a pre-tax profit of $20.6 million, from a loss of $66.4 million last year.
This was partly on the back of streamlining and 'increased management attention'.
But the main boost was from property development (part of investments), which posted healthy earnings from the sale of residential units in Shanghai and Shenyang.
The group's automotive arm posted sales of $348.9 million, down from $461.3 million previously. As a result, its share of total group turnover was pared from 23.5 per cent to 16.6 per cent.
WBL blamed the arrival of a second Chevrolet dealer, as well as delays in new models, for the poorer showing.
Pre-tax profit from the automotive segment shrank by 20.6 per cent to $17.3 million.
Technology manufacturing enjoyed a 21.9 per cent rise in sales to $1.36 billion, but pre-tax profit fell by 13.9 per cent to $108.8 million. This was because of a weaker flexible printed circuits (FPC) market, 'particularly in the last two quarters'. Precision manufacturing incurred losses of $11.9 million.
Its smallest division, technology solutions, incurred a 2.3 per cent dip in sales to $117 million, while pre-tax profit tumbled by 45.2 per cent to $3.4 million.
Its O'Connor's unit, which supplies security cameras and surveillance systems, did better. This offset weaker showing at its wireless unit, which was hit by slower sales of Bluetooth headsets.
Earnings per share rose from 4.1 cents to 28.3 cents, while net asset value as at Sept 30 was $3.24, up from $3.14.
Directors expect 2007 to be another tough year with stiff competition. Several new models from its suite of car brands like Jaguar, Chevrolet and Volvo will be launched. This will fuel sales. Contributions from the newly acquired Renault franchise in Singapore will also flow in.
WBL also expects to divest itself of some property holdings.
The group is fighting a suit from American unit Multi-Fineline Electronix (M-Flex), which is seeking to direct the group to vote against M-Flex's proposed offer for outstanding shares in another subsidiary MFS Technology. M-Flex alleges that WBL will breach its fiduciary duties to M-Flex minority shareholders if it did not vote against the offer.
The proposed US$500 million (S$782 million) transaction, scuttled in August, would have created the world's second-largest maker of FPCs. The group incurred $10.3 million in fees relating to the deal.
WBL filed a motion last week seeking to dismiss the action. It was unable to say what impact, if any, the legal action might have.
Meanwhile, directors have declared a final dividend of five cents per share, unchanged from last year.
