Kong, March 14, 2007) -- 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, 2006.
During the six-month period, the Group recorded a turnover of HK$691,129,000 (2005: HK$710,128,000). Profit attributable to shareholders increased by 47% to HK$7,366,000 (2005: HK$5,011,000), thanks to the satisfactory performance of its manufacturing business and the Group¡¦s effective cost control efforts. Earnings per share were HK 2.05 cents (2005: HK 1.39 cents). The Board has recommended the payment of an interim dividend of HK 1.0 cent per share (2005: HK 1.0 cent).
Mr. Hui Sai Chung, Chairman of Ngai Hing Hong, said, ¡§During the review period, high crude oil and raw material prices pushed up the Group¡¦s operating costs. In combat, the Group adopted a series of cost control measures including lowering fuel cost and continuing to shorten account receivables recovery period so as to increase cash flows and reduce interest expenses. As a result of these measures, combined with the notable growth of our manufacturing business, the Group achieved satisfactory results in the first half year and recorded double digit increase in profit. ¡¨
During the review period, the Group¡¦s engineering plastics manufacturing business grew steadily reporting an 8.8% increase in turnover. The turnover from plastics trading decreased but the gross profit margin was maintained. Among the Group¡¦s major business segments, domestic sales of colorants and compounded plastic resins boasted the most impressive growth with turnover 31.6% higher than in the same period last year.
To support its business development and meet growing orders, the Group opened a new factory in Xiamen in October 2006 to increase production capacity. The new plant in Xiamen has not only boosted the Group¡¦s overall production capacity, but is vital in supporting the Group¡¦s sales growth. The Group also expects to achieve greater economies of scale and further lower overall production cost.
During the period under review, the Group reached an agreement with PolyOne Corporation (¡§PolyOne¡¨) to work together in developing the PVC market in China. Pursuant to the agreement, the Group will sell part of the assets of a subsidiary to PolyOne and subsequently acquire a 5% stake in PolyOne¡¦s subsidiary that focuses in the PVC business. PolyOne is a leading compounding and North American distribution company of thermoplastic compounds, specialty PVC resins, colour and additives. Combining the Group¡¦s extensive experience and network in China and PolyOne¡¦s existing clientele in Asia and its diverse product portfolio, the Group is confident of expanding the scope of its PVC business and advancing its competitive edges and standing in the China market.
Mr. Hui concluded, ¡§The Group will push on with developing the abundant potential it sees in the China market. It believes, as raw material prices stabilize, its trading business will pick up, and its overall performance will advance in steady strides in the second half year. ¡¨
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.