TURNOVER GREW 17.8% TO HK$710,128,000
(Hong
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.
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