Baker Tech higher revenue not flowing through

Disappointing full year results from Baker Technology today.

Results released for nine months in Nov 2011 was already quite bad but gross profit is still better than previous year, by 15%.  But just one terrible final quarter and its full year gross profit is lowered by 6% versus year 2010.  The bad quarter 4 gross profit margin was due the usual excuse of different product mix and competitive pricing.

Its full year revenue and profitability overview as below.

- revenue increased from S$48.4 million in FY2010 to S$81.1 million in FY2011.
 
- net order book stands at US$80 million, a significant improvement from a net order book of US$33 million a year ago. These orders are expected to be completed within the next 12 to 18 months.

- net profit reduced from S$27.4 million for FY2010 to S$7.6 million for FY2011. The reduction was mainly due to:-

(1) the absence of a share of results from investment in PPLS, from which the Group recorded S$15.8 million in FY2010, as a result of its disposal of PPL Holdings Pte Ltd in October 2010;

(2) a lower gross profit margin for projects in FY2011 as a result of different product mix and competitive pricing;

(3) higher share of losses from its 49% stake in York due to foreign exchange losses resulting from the weakening of the Indian Rupee against the US$

(4) higher administrative expenses of S$3.4 million due mainly to higher legal fees of S$2.8 million incurred in FY2011 in relation to the legal suit with Sembcorp Marine Ltd.

(5) the reduction in net profit was partially offset by a lower foreign exchange loss in the current year. For the year ended 31 December 2011, foreign exchange losses of S$0.9 million versus a loss of S$2.5 million in FY2010, primarily due to the weakening of the US$ against the S$.

Dividend - year 2011 $1.0 cents vs year 2010 $3.0 cents.