Armstrong Industrial

Armstrong Industrial: 2Q13 net profit deteriorated 83.2% to $0.4m due to a loss on hedging contracts and FX loss amounting to $1.1m, higher tax expenses and the absence of a mark-to-market gain on forward FX contracts of $0.8m recognized in 2Q12. Revenue improved to $56.8m (+3.2%) and gross profit margin went up 2 ppts to 21.8% as Armstrong benefitted from the weaker JPY, increase in turnover and favourable changes in product mix. The automotive segment (+20.7%) remains the key revenue driver as sales by Japanese customers in China improve and new projects were secured with a European car manufacturer. Overall, China operations grew 33.9% although Singapore (-12.7%), Indonesia (-11.8%) and Thailand (-4.8%) operations were a drag, while Malaysia and Vietnam remained flat. China remains the largest contributor for Armstrong at 35.4%, followed by Thailand (25%) and Singapore (23.1%). The global hard disk drive market is expected to remain subdued in 2H13 with the shift towards tablets. Armstrong is currently seeking voluntary delisting at an offer price of $0.40/share.