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Nam Lee reports lower earnings despite higher revenue as costs surged

The company is keeping its full year dividend at 2 cents per share

Nam Lee Pressed Metal Industries has reported higher revenue of $117.2 million for 2HFY2022 ended Sept, versus $104.2 million in the year earlier period.

However, because of higher material and labour costs, the company's earnings dropped from $7.76 million to $336,000 instead.

For the full year, the company's earnings dropped by just over a third to $10.16 million. Revenue was up 15.6% y-o-y to $229.2 million.

Despite the lower earnings, the company plans to maintain a final dividend of 1.5 cents, bringing full year payout to 2 cents - same as last year.

The company warns that the pandemic and the prolonged fighting between Russia and Ukraine's having a "major impact" on global supply chains.

There's also higher inflation and interest rates and forex fluctuations to cope with.

"The management's primary focus is on operational efficiency and controlling costs during this challenging time. We will continue to be prudent in terms of cash conservation and cash flow management to ensure its operations remain sustainable in this challenging environment," the company says.

"We expect more challenging environment and the demand for reefer containers, and thus the components that we manufacture, to reduce significantly in the next 12 months," the company adds.

Nam Lee Pressed Metal shares closed at 36 cents on Nov 25, up 1.43% for the day, down 6.58% year to date.

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