Financials
Second Quarter Financial Statement And Dividend Announcement Ended 30 June 2009
Financials Archive
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Statement of Comprehensive Income
Balance Sheet
REVIEW OF FINANCIAL POSITION - 1HFY2009 VS 1HFY2008
Revenue
The Group's revenue in 1HFY2009 decreased by RMB152.9million or 39.2% compared to 1HFY2008 and on a quarter-to-quarter basis, decreased by RMB79.9million or 42.7% compared to 2QFY2008. The decrease was mainly contributed by the continuous sliding in orders from major customers in China and price adjustment for a major customer in China. The decrease was moderated by the increase in orders from the Group's subsidiary in Poland.
Cost of sales
The Group's cost of sales comprised of material, labour and production overheads. The decrease of RMB120.1million or 38.0% in 1HFY2009 and on a quarter-to-quarter basis, decreased by RMB61.7million or 40.2% is in line with the decline in revenue.
Gross profit
The Group's gross profit in 1HFY2009 decreased by RMB32.8million or 44.4% compared to 1HFY2008 and gross profit margin reduced slightly by 1.6% to 17.3% from 18.9% in 1HFY2008.
On quarter-to quarter basis, gross profit decreased by RMB18.2million or 53.6% compared to 2QFY2008 and gross profit margin reduced by 3.4% to 14.7% from 18.1% in 2QFY2008. This is due to the substantial reduction in orders and price adjustment from a major customer in China as mentioned above.
Other operating income
Other operating income decreased by RMB3.1million or 59.4% to RMB2.1million in 1HFY2009 compared to 1HFY2008 and on quarter-to-quarter basis, a decrease of RMB4.4million or 97.0% compared to 2QFY2008. The decrease was mainly due to a tax incentive of RMB1.8million received from China tax authority under export incentive scheme and RMB2.0million of foreign currency exchange gain resulted from the appreciation of USD and Zloty against China Yuan in 1HFY2008.
Administration expense
Administration expenses decreased by RMB6.2million or 16.8% to RMB30.6million in 1HFY2009 compared to 1HFY2008 and on quarter-to-quarter basis, a decrease of RMB4.4million or 22.2% compared to 2QFY2008. The decrease was contributed by the closure of the two branches in China towards the end of FY2008.
Finance cost
Finance cost decreased by RMB3.2million or 52.4% to RMB2.9million in 1HFY2009 compared to 1HFY2008 and on quarter-to-quarter basis, a decrease of RMB1.8million or 61.0% compared to 2QFY2008. The decrease was mainly due to repayment of bank loans and lower interest rate on renewal of existing loans.
Income tax expense
Income tax expense decreased by RMB5.7million or 73.1% compared to 1HFY2008 is attributed to the lower profit before tax and a tax grant of RMB0.8million received from China tax authority on research and development incentive scheme.
Net profit and Net profit margin
The net profit decreased by RMB19.7million or 77.8% to RMB5.6million in 1HFY2009 and net profit margin decreased by 4.1% from 6.5% in 1HFY2008 to 2.4% in 1HFY2009.
On quarter-to-quarter basis, a net loss of RMB0.7milion was recorded. The net loss was largely resulted from the substantial reduction in orders in China and price adjustment for a major customer in China moderated by the increase in sales orders from the Group's subsidiary in Poland.
REVIEW OF PERFORMANCE - 2QFY2009 VS FY2008
Current assets
Cash and bank balance representing 20.7% of the Group's total assets was RMB3.0million or 2.61% lower compared to FY2008. The decrease was due to repayment to bank loans.
Trade receivables amounted to RMB52.1million representing 9.8% of the Group's total assets has decreased by RMB13.1million or 20.1%. This was mainly attributable to the substantial reduction in orders from major customers in China.
Inventories amounted to RMB17.9million representing 3.4% of the Group's total assets. The increase of RMB0.9million or 5.5% was mainly due to slower turnover of raw materials purchased for a turnkey customer in China. This is evidenced by the increase in inventory turnover days, from 11 days for FY2008 to 17 days in 1HFY2009.
Non Current assets
The Group's property, plant and equipment amounted to RMB333.4million, a 6.1% or RMB21.8million decrease from FY2008. The decrease was mainly due to depreciation charged of RMB22.3million.
Liabilities
The Group's total liabilities as at June 30, 2009 amount to RMB141.0million, a decrease of RMB36.4million or 20.5% from FY2008.
The variance is mainly due to net repayments of bank loans of RMB37.7million moderated by the increase of additional payroll provisions in Poland of RMB1.8million and other miscellaneous purchases of RMB1.8million in China.
Equity
The Group's equity as at June 30, 2009 amounted to RMB391.9million, a decrease of RMB0.3million compared to FY2008. The decrease was due to an increase of translation loss of RMB4.7million from RMB26.6million in FY2008 to RMB31.2million in 1HFY2009 as Poland Zloty continues to depreciate against China Yuan. The drop was moderated by the profit generated in 1HFY2009 of RMB5.7million.
COMMENTARY
On 5 May 2009, the major shareholder of the Company, Lead Data Inc, via its wholly-owned subsidiary E-Top Union Inc, announced its proposal to voluntarily delist the Company from Singapore Exchange Securities Trading Limited. The delisting will be subject to the approval of the shareholders of the Company at a general meeting to be called.
In light of this, the board believes it would not be appropriate to make any statement of prospect of the Company for the current financial year ending December 31, 2009.
