SINGAPORE and HONG KONG, May 14, 2013 /PRNewswire/ --
Financial Highlights
| (RMB' mil) | 1Q2013 | 1Q2012 | Change % |
| Revenue | 202.4 | 230.4 | (12.1) |
| Gross profit | 51.1 | 67.9 | (24.8) |
| Gross profit margin (%) | 25.2 | 29.5 | (4.3) ppt |
| Share of loss of an associate | (4.0) | (4.6) | (12.5) |
| (Loss)/Profit attributable to equity holders | (4.9) | 15.3 | N.M.* |
* Not Meaningful
Midas Holdings Limited ("Midas" or the "Company", together with its subsidiaries, the "Group"; SGX-ST stock code: 5EN; SEHK stock code: 1021) reported revenue of RMB202.4 million for the three months ended March 31, 2013 ("1Q2013"). This compares against revenue of RMB230.4 million for the corresponding financial period ("1Q2012").
The lower revenue was mainly due to lower contribution from the Group's core Aluminium Alloy Extruded Products Division, from RMB221.8 million in 1Q2012, to RMB195.7 million in the quarter under review. Within the Aluminium Alloy Extruded Products Division, contribution from the Transport Industry accounted for 44.0% of its revenue, while the Power Industry took up 10.2%. The "Others" segment, comprising mainly the supply of aluminium alloy rods and other specialised profiles for industrial machinery accounted for 45.8%.
Due to higher per unit production cost arising from lower utilisation of production capacity and a change in product mix, the Group's overall gross profit margin was 25.2% in 1Q2013, compared to 29.5% in 1Q2012.
At the costs front, the Group enjoyed a 13.6% savings in selling and distribution expenses which decreased from RMB10.2 million to RMB8.8 million in 1Q2013, mainly due to lower transportation expenses. However, higher operating costs, including increase in depreciation, property taxes, travelling expenses and staff costs resulted in higher administrative expenses which increased from RMB20.5 million in 1Q2012 to RMB26.0 million in 1Q2013.
Finance costs increased RMB5.5 million to RMB19.1 million in 1Q2013, mainly due to higher bank borrowings. Approximately RMB8.7 million (1Q2012: RMB1.5 million) of the interest on bank borrowings that were used to finance the construction of property, plant and equipment for the new production lines were capitalised.
The Group's share of loss from its associated company Nanjing SR Puzhen Rail Transport Co., Ltd ("NPRT") amounted to approximately RMB4.0 million in 1Q2013. This was largely due to fewer train cars delivered to its customers during the period under review.
As a result of the above, the Group reported a net loss attributable to shareholders of RMB4.9 million. Nevertheless, the Group's balance sheet remains healthy, with cash and cash equivalents of RMB463.3 million as at March 31, 2013.
Mr Patrick Chew, Chief Executive Officer of Midas, said, "The PRC railway sector encountered an unprecedented setback in 2011, resulting in a sectoral slowdown that affected industry players. As a leading player in the PRC passenger rail sector, Midas was not spared from the aftershocks."
"Nonetheless, while lingering impacts of the slowdown continued to impact our financial performance, we are encouraged by the inflow of new orders both in the PRC and international markets in the first quarter, which reflects both PRC and international customers continuing endorsement of our capabilities as a quality supplier. These order wins are expected to contribute to our performance going forward."
Outlook
The outlook for the PRC rail transportation industry is expected to remain positive in 2013, backed by the PRC Government's support to grow China's transportation network. The former Ministry of Railway had in January 2013 announced the Government's plans to invest approximately RMB650 billion into the railway sector for this calendar year, of which approximately RMB520 billion is planned for the development of railway infrastructure (Note 1).
However, lingering impacts of the sector slowdown in 2011 and 2012 are expected to put pressure on the Group's operating performance in the near-term. In addition, the on-going restructuring of the Ministry of Railways into administrative and commercial arms may also influence industry developments.
"While we continue to see strong growth potential for the PRC railway industry, we are also active in growing our business in the export markets. In addition, we are positioning ourselves to diversify into the production of high precision, high specification aluminium alloy plates, sheets, strips and foils. We believe that this diversification, together with the recovery of the PRC railway sector, will position us well for further growth in the long run," Mr Chew concluded.
Note:
About Midas Holdings Limited
Founded in 2000, Midas is today the leading manufacturer of aluminium alloy extrusion products for the passenger rail transportation sector in the PRC. Over the years, Midas has built an established track record in supplying to the PRC passenger rail transportation sector, which includes participation in landmark contracts such as trains for the Beijing-Tianjin High Speed Train Project, and inter-city high speed trains for the CRH3-380 Project. Midas' customers include domestic PRC licensed train manufacturers from China South Locomotive & Rolling Stock Corporation Limited and China CNR Corporation Limited, as well as international customers such as Alstom Transport, Siemens AG and Bombardier Transportation.
Midas has a strategic 32.5% stake investment in Nanjing SR Puzhen Rail Transport Co., Ltd ("NPRT"), an associate company engaged in the development, manufacturing and sale of metro trains, bogies and their related parts.
In 2012, Midas was honoured with the 'Supplier of the Year Award' by Bombardier Transportation, one of the world's leading manufacturers of innovative aerospace and rail transport solutions. In recognition of its consistent growth and profitability, Midas was included in Forbes Asia's "Best Under A Billion" list for four consecutive years from 2006 to 2009. The Company was also awarded the "Best Investor Relations Award (Gold)" at the Singapore Corporate Awards 2010 in the "S$300 million to less than S$1 billion market capitalisation" category. As testament to its strong brand name and reputation in the PRC, Midas was conferred the prestigious "China Well-Known Trademark" by the Trademark Office of the State Administration for Industry & Commerce of the PRC ("SAIC") in 2011.
Midas has a primary listing on the Mainboard of the Singapore Exchange Securities Trading Limited and a secondary listing on the Main Board of the Stock Exchange of Hong Kong Limited.
