InnoTek 3Q’10 Net Profit Rises 374% To S$4.5 Million

• Revenue of wholly owned Mansfield Manufacturing Company Limited rises 22.6% to $112.8 million in 3Q’10 from S$92.0 million in 3Q’09 on higher sales of TV components and tooling

• 3Q’10 EPS of 1.98 cents is 382.9% higher than 0.41 cent in 3Q’09

• 9M’10 net profit rises to S$13.7 million from S$4.6 million in 9M’09

• Financial position remains strong – Group net cash position of S$60.8 million as at 30 September; also holds 18.4 million treasury shares

SINGAPORE, 12 November 2010 – InnoTek Limited (“InnoTek” or “the Group”) announced today that its net profit after tax for the July-September 2010 (“3Q’10”) period rose 373.9% to S$4.5 million from S$1.0 million in 3Q’09 as its wholly owned subsidiary Mansfield Manufacturing Company Limited (“MSF”) recorded higher sales of TV components and tooling.

SGX Mainboard-listed InnoTek said the net profit was achieved on the back of revenue of S$112.8 million in 3Q’10, an increase of 22.6% from S$92.0 million in 3Q’09, on continued pent-up demand and improvement in business sentiment.

Revenue from the precision metal components and sub-assembly segment rose to S$103.2 million in 3Q’10 from S$83.4 million in 3Q’09. Apart from higher sales of TV components, frame sales from its Dutch subsidiary Exerion Precision Technology Holding B.V. also rose to S$9.6 million in 3Q’10 from S$8.6 million in 3Q’09 due to higher demand for printing and medical equipment components.

The Group’s Q3’10 net profit improved by S$3.5 million compared to Q3’09 mainly due to the higher revenue. However, profitability was affected by higher material costs and the weakening of the USD/HKD against RMB. This was mitigated by a S$0.4 million write-back of doubtful trade receivables compared to a provision of S$0.4 million a year ago after successful collection of the debts.

At the Company level, InnoTek reduced its loss to S$1.3 million in 3Q’10 from S$1.4 million in 3Q’09 mainly due to lower foreign exchange losses. Since the end of FY09, the Company had converted most of the US Dollar cash balance to SGD to mitigate the impact of the weakening of the US Dollar.

For the nine months ended 30 September 2010 (“9M’10”) InnoTek’s net profit after tax rose 199% to S$13.7 million from S$4.6 million in 9M’09, on revenue of S$316.9 million, which was 17.9% higher than S$268.7 million, respectively.

Earnings per share rose to 5.97 cents in 9M’10 from 1.96 cents in 9M’09. Net asset backing per share as at 30 September stood at 84.8 cents compared to 85.8 cents as at 31 December 2009 following payment of dividend in May 2010 amounting to S$11.4 million or 5.0 cents per share.

The Group’s financial position remains healthy, with net cash position of S$60.8 million or 26.6 cents per share, comprising cash and cash equivalents of S$99.1 million less total borrowings of S$38.3 million, as at 30 September. It also holds 18.4 million treasury shares repurchased earlier to enhance shareholder value.

On the outlook, the directors expect Q4’10 demand for office automation and automotive components to remain sustainable but demand for TV components to soften. As such, Q4’10 performance is expected to be weaker than the last two quarters. Nevertheless the Group will remain profitable in Q4’10 and focus more on cost management and improving operational efficiency to mitigate the impact of lower revenue.

“In the absence of any unforeseen circumstances, we expect the Group to remain profitable in 4Q’10 but to perform weaker than Q3’10 while overall FY10 performance will exceed that of FY09,” said InnoTek Group Managing Director Mr Yong Kok Hoon.

“We will continue to actively pursue appropriate merger and acquisitions opportunities. We will maintain our cautious stance, focusing on earnings-accretive businesses, and stringently evaluate feasible investment proposals,” he said.