TURNOVER GREW 17.8% TO HK$710,128,000
Kong, March 15, 2006) -- Leading Hong Kong plastic resins and specialty
colourants supplier Ngai Hing Hong Company Limited and its subsidiaries (the
¡§Group¡¨) (Stock code: 1047) today announced its interim results for the six
months ended December 31, 2005.
During the six-month period, the Group recorded a turnover of HK$710,128,000 (2004: HK$603,067,000), representing a growth of 17.8% over that of the corresponding period last year. Profit attributable to shareholders was HK$5,011,000 (2004: HK$12,843,000), a drop of 61% from last year¡¦s, attributable mainly to the consistently high crude oil and raw material prices, which drove up operating costs of the Group and caused gross margin to slide. In addition, adoption of new HKFRS and increase in interest rate decreased respectively the Group¡¦s profit by approximately HK$1,700,000 and HK$2,500,000. Earnings per share for the period amounted to HK 1.39 cents (2004: HK 4.28 cents). The Board has recommended the payment of an interim dividend of HK 1.0 cent per share (2004: HK 1.0 cent).
Mr. Hui Sai Chung, Chairman of Ngai Hing Hong, said, ¡§Despite the tough business environment, the Group achieved satisfactory results in the first half year and recorded double digit growth in turnover. During the period under review, although consistently high crude oil and raw material prices affected our operating costs, by adopting various cost control measures, lowering inventory level and shortening the account receivables recovery period, the Group effectively increased cash flows, reduced gearing and interest expenses. The economic environment is still challenging, but we believe the Group will be able to sustain stable growth in the second half of the year riding on the growth momentum built up in the first half year.¡¨
During the period under review, the Group¡¦s plastic trading business registered satisfactory growth, mainly a result of the persistently high plastic prices, the Group¡¦s prudent raw material inventory policy and the efforts of its sales team. On the other hand, the Group¡¦s engineering plastic manufacturing business maintained stable growth. The Group stepped up marketing efforts for its new products, introduced those products to other industries and developed new product applications, which contributed to the consistent rise in product prices and sales volume of engineering plastics products.
PVC compounds business, the Group¡¦s new business segment, also recorded growth during the period. The Group is optimistic about the prospects of this new business in the investment stage, and expects it to start bringing in profits in the foreseeable future. As for the colorant segment, domestic and overseas sales were still affected by keen market competition and high raw material prices. Customers had been cautious in placing orders, which affected the performance of this segment.
The Group¡¦s past efforts in building plants to boost overall production capacity are expected to bring about better economies of scale and lowering of overall production costs. In the second half of the year, Ngai Hing Hong will step up sales and marketing efforts, widen its customer base, enhance overall operating efficiency and strive for maximum cost-effectiveness. The Group also sees new business segments broadening its income base and driving its future growth.
Mr. Hui concluded, ¡§As the global economy continues to improve, the Group sees rosy prospects for its future. The Group has joined the International Color Alliance, a platform for it to maintain close business relationship and exchange technical know-how with other overseas colorant manufacturers, to solidify its global sales network. The Group will continue to strive for satisfactory results in the future so as to bring rewarding returns to our shareholders. ¡¨
About Ngai Hing Hong Company Limited
Ngai Hing Hong provides a total solution to plastic products manufacturers with services and products ranging from plastic resins (including polymers and engineering plastics) selection, complementary computerised colour matching services, on the spot technical advice, to the supply of custom-made plastic colourants, engineering plastics and PVC compounds for the plastics industry.