HONG KONG, April 1, 2016 /PRNewswire/ -- EcoGreen International Group Limited ("EcoGreen" or the "Group"; Stock code: 2341) announced today its annual results for the year ended 31 December 2015.
During the year, the Group's turnover was RMB1,537 million, up 8% from last year. However, due to the combined effect of the net losses on those RMB/USD foreign currency contract, net foreign exchange losses on USD borrowings, and legal and professional fees arising from proposed mergers and acquisitions transactions, profitable attributable to shareholders was down 23% to RMB85.52 million as compared to 2014. Basic earnings per share amounted to approximately 15.8 cents (2014: 20.7 cents). If excluding the impact of aforementioned non-recurring items, profit attributable to shareholders would have increased by 8% to RMB163 million.
The Board has proposed to pay a final dividend of HK2.6 cents per share (2014: HK5.1 cents); which together with interim dividend of HK2.2 cents (2014: HK2 cents), will bring the total dividend per share for 2015 to HK4.8 cents (2014: total dividend was 7.1 cents). In addition, the Board has also proposed bonus issue of shares on the basis of two bonus shares for every ten existing shares.
Commenting on the annual results of 2015, Mr. Yang Yirong, Chairman and President of the Group said: "In 2015, the global economy was marked by a slow recovery. Compared to the first half of the year, business environment was much volatile in the second half, of which, on one hand, due to the economic slowdown in Europe and Japan, emerging countries like China saw a continued downward economy; On the other hand, the United States announced its first interest-rate increase in order to end the 'Quantitative Easing' monetary policy in times of unstable momentum in world economic recovery. During the year, enterprises faced enormous risks and challenges due to price decrease in bulk commodities, weak demand for trade, coupled with fluctuations in exchange rate, in particular the significant depreciation of RMB against the USD. In China, enterprises also faced greater pressures of demand slowdown, relatively high land and labor costs and increased investment in environmental protection compared with the previous year. To cope with such challenging environment, EcoGreen had already mapped out and successfully executed new corporate strategies for a number of important aspects of its business. As a result, it still achieved growth in turnover compared with the previous year."
During the year under review, the Group's gross profit increased by 9% to RMB356 million. Gross profit margin increased from 23.1% in 2014 to 23.2% in 2015.
In terms of the Group's business segments, Scent and Taste products continued to be the Group's core products segment. Due to its diversified applications coupled with the development of emerging markets, leading a rising market demand for the relevant products. The Group has launched over 100 types of scent and taste products during the year in order to satisfy market demand. For the year ended 31 December 31 2015, the revenue from the Scent and Taste segment increased by 4% to RMB975 million and accounted for 64% of the Group's overall revenue (2014: 66%). Gross profit margin increased from 23.3% in 2014 to 24.6% in 2015.
In respect of the Naturals products, the total revenue from Naturals products was RMB283 million (2014: RMB228 million), representing an increase of 24% from last year and accounting for 18% of the Group's sales volume (2014: 16%). Gross profit margin decreased by 4.4 percentage points to 18.6%.
Revenue of the Group's Specialties and Other Chemicals business recorded a growth of 11% to RMB278 million, accounting for 18% of the Group's sales (2014: 18%). Gross profit margin increased from 22.6% in 2014 to 22.9% in 2015.
To cope with the external challenges of the environment, the Group has mapped out and executed several new corporate strategies, including: the implementation of "Smart Production and Supply Chain Management Services" strategy which saw the Group's effective implementation of the integrated business of the supply chain services through preferred partners and outsourced productions; and constructions of Gulei project are expected to initialize in phases in the second half of 2016. The Group expects in future a new production system compiled of Industry 4.0 characteristics and the new innovative strategy of "Smart Production and Supply Chain Management Services" will be the key leap-forward development.
In terms of product portfolio, semi-synthetic products made from naturals raw materials remained the edge of steady growth, while the petroleum-based aroma chemicals of floral, woody and green notes for daily necessities also achieved a rapid growth which accounting for nearly half of the turnover and contributing to the business growth in the year. The variety of aroma chemicals increased over 10%; sales revenue from the new products has become the main driving force of the Group's revenue.
In term of the Group's natural resources strategy, international procurement is gradually scaling up and has formed an integrated balance in secure supply with domestic resources. In support of Bohai Commodity Exchange, domestic procurement has seen gradual improvement in efficiency on its e-trading platform. Coupled with effective management of natural resources, the Group was able to achieve benefits in controlling production cost, resulting in a combined gross profit margin of 23.2%.
In response to the needs of natural product business growth, the Group has launched a comprehensive transformation plan in Changtai base, remodeling a considerable part of its facilities into professional devices, which compiles with the requirement and standard for refining essential oils. The devices have generated additional productivity and yielded preliminary results in the scale of production.
In regards to Scent and Taste products, the special type of fragrance products targeting end consumers, which has seen preliminary results in hotels, chain stores and supermarkets. The Group has also created newly developed flavored series specifically for retail consumers. In addition to traditional sales channels and e-commerce, the Group is also actively exploring a new ground breaking market sector for consumer goods.
Risk prevention was also a priority for the Group during the year. Among the measures implemented, the Group terminated and locked-in all exchange contracts to limit loss. At the same time, the Group also made effort to minimalize short and long term exchange risks by actively hedging its FX exposures on operation and loans. During the year under review, the Group's financial position remains solid. As at 31 December 2015, the Group's net cash amounted to RMB335 million (2014: RMB194 million). Gearing ratio was approximately 68%. With strong liquidity and sufficient financial resources, the Group is well equipped to meet working capital requirements and the future investment expansion.
Mr. Yang said: "In the face of uneven recovery momentum in world's major economies, coupled with decreased price in international bulk commodities, transformation of mainland economy and normalization of United State's monetary policy, the global economic landscape remains very uncertain, which will continue to weigh on the world economy and the Group's business development next year. The Group will continue to deepen its business transformation, integrate resources and improve management standards, devote to implementing 'Smart Production and Supply Chain Management Services' as well as developing 360-degree aroma chemicals, bolstering the Group's leading position within the industry. In the meantime, the Group will also actively seek opportunities for mergers and acquisitions as well as cooperation and strategic alliance with synergies, to achieve rapid, inorganic growth in the Group's related business segments."
Corporate background
EcoGreen is a leading fine chemical company in China, specializing in natural and natural identical chemical production. Apart from its core production of fine chemicals in synthetic aroma chemicals and pharmaceutical intermediates, its business has progressively expanded into other product categories such as natural extracts, safe food ingredients, seasonings and green specialty chemicals. It is also a sizable fine chemical enterprise in China adopting both natural renewable and petroleum-based resources as feedstocks, equipped with its unique environmental friendly technologies in chemical synthesis and bio-conversion, to meet with international "Green Chemistry" standards in its manufacturing operation. Its goal is to become one of world's leading solution-providers in fine chemical industry.