INNO-PACIFIC Holdings posted a 2.5 per cent drop in full-year group net earnings to $6.5 million. It posted a profit for the period due mainly to a fair value gain of $12.9 million from investments held for trading. The effect of this gain was reduced by a writedown of $2.4 million on available-for-sale investments and a provision for impairment in the value of a factory building under construction of $0.8 million.
Group turnover slipped 9.9 per cent to $14.1 million for the year ended Dec 31, 2010. The main reasons for the drop were declines in sales of marketable securities and revenue from the telecommunication sector.
The group wound down its loss-making telco subsidiary in Singapore at the end of last year after it failed to challenge incumbents for a slice of the market for Internet-based telecommunications services.
PG Communications Pte Ltd used to sell a range of Internet-based telephony services to businesses and consumers. These included prepaid international calling cards as well as phone systems for offices.
'The telecommunication market remained highly competitive, as incumbent telecommunications companies introduced calling cards services at extremely low prices. The aggressively priced packages offered by our competitors have had a negative impact on both the revenue and gross profit of the group's telecommunication service business. PG has decided to exit from the Singapore market,' Inno-Pacific said in its results statement released to the Singapore Exchange yesterday.
The closure will not impact Inno-Pacific's telco operations in Malaysia. Inno-Pacific and its Malaysian unit, PG Communications Sdn Bhd, believe that the Malaysian telco market, especially the high speed Internet access sector, remains underserved and is an opportunity that the unit will be concentrating on.
Inno-Pacific's earnings per share fell from 0.61 cent for FY2009 to 0.56 cent in FY2010. But, net asset value per share rose from 3.26 cents at end-2009 to 3.68 cents at end-2010. No dividends have been recommended.
The counter last traded on Thursday at 1.5 cents, unchanged from the previous day's closing.