Topline up, bottomline down. PCB driller Jadason saw a 72% increase in its 3Q08 revenue to S$58.5m although net profit was 58% lower at S$2.1m. This was mainly due to growth in the company’s lower-margined Equipment and Supplies (ES) division outstripping that of the Manufacturing and Support Services (MSS) segment.

Balance sheet concerns linger. Net gearing remained high at 61% although it was slightly better from 65% in 2Q08 while current ratio remained relatively flat at 1.3x. The company was also unable to generate a positive operating cash flow in 3Q08. In light of the current credit conditions, SINGAPORE EQUITY note that Jadason may risk incurring higher borrowing costs should it continue to fail to generate cash to repay its debt which mainly consists of short-term loans.