Extracted from Annual Report 2020
On behalf of the Board of Directors (the "Board") of InnoTek Limited ("InnoTek" or the "Group"), I am pleased to share with shareholders our financial performance for the financial year ended 31 December 2020 ("FY'20"). Despite the challenges faced during the COVID-19 pandemic, our financial performance has remained resilient.
The pandemic made its impact felt throughout the world, disrupting supply chains and affecting business globally. InnoTek was no exception. In the early days of the pandemic, the Group took decisive action to temporarily shut down its manufacturing plants and institute strict safety protocols after reopening to protect the health and welfare of InnoTek staff and customers. As a result, we have not had a single case of infection throughout the year.
The Company recorded a strong recovery in the second half of the financial year ("2H'20"). We closed the year with marginally lower revenue, while net profit declined 16.7% compared to FY'19 to S$13.9 million, due to higher taxes.
This is our fifth consecutive year of profitability. This achievement under such challenging conditions underscores the hard work and adaptability of the entire InnoTek team under the leadership of our CEO Mr. Lou Yiliang.
The Automotive sector saw an increase in sales, as China, the only major economy to recover from the pandemic, pushes for greater domestic consumption and adoption of new energy vehicles. We look forward to further growth in this sector by adding new programs and customers.
The TV/Display segment saw significant growth amid greater demand for home entertainment, as people around the globe stayed at home due to stay-home measures and shut down of facilities. In contrast, revenue on the Office Automation ("OA") front decreased as dampened economic sentiment impacted the industry at large.
Our production facility in Rayong, Thailand, which had begun mass production to support an OA customer this year, saw limited growth due to the overall global economic slowdown. The facility will be further outfitted to support Auto customers.
We have continued to focus our efforts to improve productivity and margin efficiency, moving our operations in-house to reduce outsourcing costs, improving automation and optimising material costs. Subsidies from the governments of China and Singapore have also aided business recovery from the pandemic. As a result, our gross profit margin has increased to 24.6% from 21.8%.
We are well-poised to tackle further market volatility ahead, as we have maintained a healthy balance sheet, with cash and cash equivalents of S$71.6 million as of 31 December 2020. As the world recovers from the COVID-19 pandemic, I am confident the Group will build upon our strong customer base, and look forward to improved performance in the year ahead.
In appreciation of your faith and support in InnoTek throughout this challenging period, the Board of Directors has proposed a first and final dividend of 2.0 cents per share for FY'20, an increase from 1.5 cents paid in FY'19. Our increase in dividends amid the pandemic underscores our approach in building a robust business to return increasing value to shareholders.
It has been a challenging year for all. On behalf of the Board, I would like to thank our customers, business partners, shareholders, the management as well as employees for the hard work and contributions throughout the year. I would also like to extend my gratitude to Mr. Lou for his continuing leadership in navigating InnoTek through so many challenges for the past few years. I also wish to thank my fellow directors for their guidance and counsel, and I look forward to continuing to add value to all our shareholders.