Johnson Electric reports fall in profits despite increased sales
May 18, 2016
Johnson Electric Holdings Limited, headquartered in Hong Kong, has announced group sales for its financial year ended 31 March 2016 totalled US$2,236 million, an increase of 5% compared to the previous financial year. Excluding the effects of acquisitions and foreign currency movements, underlying sales increased by 2%. Net profit attributable to shareholders, however, was reported to be down 18%, totalling US$173 million, with underlying net profit, excluding the effect of acquisitions, declining by 15% to US$180 million.
Stackpole’s range of Powder Metallurgy components include gears and sprockets, clutch components and pump components. The company also manufactures sub-assemblies, including synchronizer assemblies and assembled planetary gear carriers
The sales performance of the group during the year was stated to be mixed and, as in recent years, was negatively impacted by the strength of the US Dollar compared to a number of foreign currencies in which Johnson Electric derives a portion of its sales, notably the Euro, RMB and Canadian Dollar.
In October 2015, Johnson Electric completed the acquisition of Canada’s Stackpole International, a leading manufacturer of highly-engineered automotive engine and transmission pumps and Powder Metallurgy components. The addition of Stackpole’s pumps technology and PM expertise was stated to be an excellent fit that will enable the group to provide integrated motorised pumps to customers in the rapidly growing market for electrically controlled solutions.
It was stated that the total group’s sales figure included five months sales contribution from Stackpole International totalling US$182 million.
The Automotive Products Group (APG), the largest operating division, achieved sales of US$1,605 million including Stackpole International. Excluding the acquisition and currency movements, APG’s sales increased by 5%, which was stated to be a creditable performance in the context of a weak global economy.
“Johnson Electric’s results for the financial year 2015/16 reflected a difficult macro-economic environment, unfavourable foreign exchange rate movements and non-recurring acquisition transaction expenses. Although net income, as previously projected, declined from last year’s record levels, the underlying operating performance of the business remained solid and our financial condition continues to be healthy,” stated Dr Patrick Wang, Chairman and Chief Executive.
“Despite the rather gloomy macro-economic picture, I do see reasonable grounds to be upbeat about Johnson Electric’s own growth trajectory. In the short term, we can expect to see the Company’s revenue and earnings base in the 2016/17 financial year benefit from a full year contribution from Stackpole International and approximately ten months of contribution from AML Systems – and without the level of acquisition-specific transaction expenses incurred in the year under review,” added Wang.
