Willas-Array Electronics (Holdings) posted a net profit of HK$20.7 million for the six months ended Jun 30, swinging from a HK$78.6 million loss a year earlier, after gross margin widened and earlier impairments on receivables and inventory were reversed.

Basic earnings per share came in at 23.63 HK cents against a loss per share of 89.64 HK cents in the prior period. The board did not declare an interim dividend, in line with the previous year, saying cash will be retained for operations and growth.

Group revenue edged down 2.1 per cent year-on-year to HK$1.16 billion. By market segment, Automotive sales rose 8.2 per cent to HK$332.1 million, while Industrial slipped 2.7 per cent to HK$298.9 million and Home Appliance eased 2.8 per cent to HK$190.3 million. Dealer, Audio & Video, Telecommunications and Lighting segments all recorded double-digit declines, partly offset by a 12.9 per cent rise in the Others category. Geographically, Southern China contributed HK$475.0 million of external revenue, Northern China HK$579.9 million and Taiwan HK$104.0 million.

The earnings turnaround was driven by a rise in reported gross margin to 9.8 per cent from 3.0 per cent a year earlier, helped by a HK$18.9 million net reversal of inventory allowances versus a HK$41.8 million provision previously. Administrative expenses fell 9.5 per cent to HK$70.8 million after a cost-streamlining exercise, while net finance costs were broadly stable at HK$16.0 million.

Key headwinds included revenue contractions in Dealer (-11.4 per cent), Audio & Video (-17.3 per cent) and Telecommunications (-11.7 per cent), reflecting sanctions-related client exits, product end-of-life cycles and inventory overhangs at downstream customers.

Looking ahead, the group plans to deepen its electric-vehicle focus by expanding component lines, broadening distribution networks and strengthening supply-chain resilience. Management also outlined plans to build a collaborative platform to support customers relocating production overseas, launch a flexible partner programme for key accounts, and refine client selection using data analytics. The initiatives are intended to offset weak domestic demand and geopolitical uncertainties while positioning the company to capture structural growth in electrification and advanced components.