Rising rates help boost earnings at IT company
Rising interest rates and a revaluation gain helped information technology solutions provider Automated Systems Holdings report a 26.61 per cent gain in net profit for the nine months to December of $23.46 million.
With $311.9 million cash on hand and no bank borrowings, the company said it had generated 'satisfactory' capital interest of more than $6 million, thanks to rising interest rates.
It also booked an unrealised gain of $3 million from the revaluation of its investment in Taiwan-listed Data Systems Consulting, finance and administration controller Edward Lau Ming-chi said.
Profit from operations reached $27.72 million, up 30 per cent from a year earlier.
'We have incurred increased expenses due to the expansion of our sales team,' managing director Lai Yam-ting said.
Product sales and service-based revenue for the nine months rose 11.9 per cent and 6.1 per cent, respectively, while turnover for the third quarter was $258.6 million, up 8.4 per cent compared with the year-ago period.
'Our business is growing steadily. Compared with contracts on hand of $300 million to $400 million in previous years, we currently have contracts on hand of $500 million, and more than 60 per cent of them are service-related,' Mr Lai said.
The company would aggressively look for acquisition and investment opportunities in Taiwan, the mainland and Thailand, as it had already developed a steady business in Hong Kong, he said.
'We'll adopt more aggressive approaches such as recruiting a few dozen more people for the sales team and actively looking for customers,' he said.
Although he was bullish about the company's business outlook, Mr Lai stressed that it was not easy to boost gross profit margins due to keen competition.
