SINGAPORE and HONG KONG, Aug. 14, 2012 /PRNewswire-Asia/ --
Financial Highlights
| (RMB' mil) | 2Q2012 | 2Q2011 | Change % | 1H2012 | 1H2011 | Change % |
| Revenue | 219.8 | 313.9 | (30.0) | 450.2 | 610.4 | (26.2) |
| Gross profit | 69.3 | 107.8 | (35.8) | 137.1 | 209.9 | (34.7) |
| Share of (losses)/profits from associate | (14.1) | 5.6 | N.M.* | (18.7) | 9.8 | N.M.* |
| Profit before tax | 8.4 | 84.6 | (90.1) | 28.4 | 165.4 | (82.9) |
| Profit attributable to equity holders | 1.6 | 63.0 | (97.5) | 16.9 | 123.4 | (86.3) |
* Not Meaningful
Midas Holdings Limited ("Midas" or the "Company", together with its subsidiaries, the "Group"; SGX-ST stock code: 5EN; SEHK stock code: 1021) announced profit attributable to equity holders ("net profit") of RMB1.6 million for the three months ended June 30, 2012 ("2Q2012").
Group revenue decreased 30.0% to RMB219.8 million, from RMB313.9 million for the three months ended June 30, 2011 ("2Q2011"), as the Group saw lower contributions from its core Aluminium Alloy Extruded Products Division. Revenue from the Aluminium Alloy Extruded Products Division decreased 30.7% to RMB210.1 million for 2Q2012, accounting for approximately 95.5% of Group revenue.
Within the Aluminium Alloy Extruded Products Division, the Transport Industry remains the largest sales contributor, accounting for 61.2% of total division's revenue, with the Power Industry and Others segment contributing 8.2% and 30.6%, respectively.
In line with the lower revenue, gross profit decreased to RMB69.3 million for 2Q2012, as compared to RMB107.8 million for 2Q2011. Gross profit margin for our core Aluminium Alloy Extruded Products Division in 2Q2012 was 32.3%, from 35.0% in 2Q2011.
In tandem with the lower sales recorded, selling and distribution expenses decreased approximately 28.8% to RMB7.1 million for 2Q2012, from RMB9.9 million for 2Q2011. Administrative expenses saw an 18.6% increase to RMB23.8 million, largely due to higher payroll costs in line with the Group's expansion plans, depreciation, travelling and utilities expenses.
Finance costs rose to RMB19.9 million in the period under review, mainly due to an increase in bank borrowings and lesser interest on bank borrowings being capitalised. Approximately RMB9.4 million (2Q2011: RMB10.8 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 RMB14.1 million in 2Q2012. This was largely due to fewer train cars delivered to its customers during the period under review. In view of the above, the Group reported a net profit attributable to shareholders of RMB1.6 million in 2Q2012, from RMB63.0 million in 2Q2011.
As at June 30, 2012, the Group remained in a healthy financial position with cash and cash equivalents of RMB552.0 million.
Outlook
The Group remains cautiously optimistic on the outlook of China's railway industry over the mid to long-term. The development of the PRC railway network remains an integral component of the country's economic growth strategy and railway transportation is also the most efficient and affordable means of transportation in the PRC.
The PRC railway sector is expected to benefit from the Ministry of Railway's recently announced 16% boost in railway infrastructure investment to about RMB470 billion for 2012, lifting the total planned fixed asset investments to approximately RMB580 billion for the year. These planned investments are part of the government's "Twelfth Five-Year Plan" (2011-2015) to enhance China's infrastructure. In addition, the metro sector in the PRC is likely to grow further as less than 20 cities currently have metro systems in operation, and dozens more cities have already received approvals to build metro systems.
Mr Patrick Chew, CEO of Midas, said, "Our operating performance was impacted by the slowdown in the PRC railway sector since 2011. While the operating environment has been challenging, we are encouraged by recent developments in the PRC, which points towards a positive outlook for the railway sector."
"In view of the challenges in the near-term outlook, the Group continues to monitor developments in the PRC railway sector. We will also continue to grow other product segments and tap opportunities in the export markets." Mr Chew concluded.
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. NPRT is one of the four Licensed Metro Manufacturers licensed to undertake metro train projects on a nationwide basis in the PRC.
In recognition of its consistent growth and profitability, Midas is one of only six companies, and the only aluminium alloy extrusion products manufacturer, in Asia to be 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.
