Broadway Industrial's core net loss hit S$7.8m

Its hard disk drive segment remained a drag.

According to CIMB, Broadway reported a higher core net loss of S$7.8m versus its estimate of a S$5.1m loss due to higher than expected opex. Its FY13-14 EPS estimates fall by 8.5% as it adjusts its numbers; it also introduces its FY15 forecast. Its target price remains pegged at 0.5x CY13 P/BV (the lower end of its 5-yr band).

Here's more:

Key variances from our forecast and Broadway’s core net loss came from higher than expected sales and marketing expenses, but this was largely offset by non-core, flood related insurance claims of about S$9.4m.

Its weak top line was expected due to by weak end-demand and OEM inventory adjustment for HDD components in 2H12. On a brighter note, its foam plastics segment performed well, and is expected to continue to do so in FY13.

Broadway has made significant strides in right sizing its HDD business by reallocating excess capacity, while trying to acquire new customers for its non-HDD business, and consolidating its operations. We believe the positive effects of these measures could show up in 2H13.

The HDD segment is also expected to remain weak for 1H13 but may slowly stabilise. Management believes that the time of wild swings in HDD volumes are over.

The absence of a final dividend may be a disappointment for investors but management has opted to conserve cash.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia