Midas Reports 3Q2012 Revenue of RMB202.7 Million

• Lower revenue, higher operating expenses and finance costs, coupled with share of loss from associated company, result in Group quarterly net loss in 3Q2012
• Upward budget revision by the PRC government to further improve railway infrastructure under China's "Twelfth Five-Year Plan" expected to boost medium to long-term performance of the PRC railway sector

SINGAPORE and HONG KONG, Nov. 14, 2012 /PRNewswire/ --

Financial Highlights

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Midas Holdings Limited ("Midas" or the "Company", together with its subsidiaries, the "Group"; SGX-ST stock code: 5EN; SEHK stock code: 1021) posted a lower group revenue of RMB202.7 million for the three months ended September 30, 2012 ("3Q2012"), a 21.8% decrease from RMB259.3 million in the corresponding quarter last year ("3Q2011"), on lower contributions from its core Aluminium Alloy Extruded Products Division. Revenue for this Division was down 22.8% to RMB191.6 million in 3Q2012, accounting for 94.5% of total revenue.

Within the Aluminium Alloy Extruded Products Division, the Transport Industry remains the largest revenue contributor, accounting for 66.7% of the division's revenue, with the Power Industry making up another 10.3%. The "Others" segment, comprising mainly the supply of aluminium alloy rods and other specialised profiles for industrial machinery, contributed the remaining 23.0%.

In tandem with lower revenue, the Group's gross profit decreased to RMB63.9 million for 3Q2012, as compared to RMB86.9 million for 3Q2011. Despite the decline, the Group's gross profit margin remained at a healthy 31.5% in 3Q2012, compared to 33.5% in 3Q2011. This decrease was mainly due to a lower gross profit margin of 32.1% for the Aluminium Alloy Extruded Products Division in 3Q2012 versus 34.3% in 3Q2011 as a result of an increase in per unit production cost due to lower utilisation of production capacity.

Increases in sales and marketing expenses, which include travelling and entertainment expenses, as well as increase in transportation costs during the quarter pushed selling and distribution expenses up 10.8% to RMB13.0 million, compared to RMB11.7 million in 3Q2011. Administrative expenses went up by 33.6% to RMB24.8 million, mainly due to increases in payroll costs, depreciation, travelling and utilities expenses.

Finance costs jumped 61.9% to RMB24.6 million in the period under review, mainly due to higher bank borrowings. Approximately RMB7.6 million (3Q2011: RMB2.7 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 RMB7.0 million in 3Q2012. This was largely due to fewer train cars delivered to its customers during the quarter.

Consequently, the Group reported a quarterly loss attributable to equity holders of RMB6.1 million in 3Q2012, compared to a profit of RMB27.4 million in 3Q2011.

However, for the nine months ended September 30, 2012 ("9M2012"), the Group registered profit attributable to equity holders of RMB10.7 million on revenue of RMB653.0 million. Midas's balance sheet remains healthy, with cash and cash equivalents of RMB820.6 million as at September 30, 2012.

Outlook

The Group remains cautiously optimistic on the outlook of China's railway industry over the medium to long-term, given that railways projects are strategic to the country's infrastructure and are expected to continue progressing. The development of the PRC railway network remains an integral component of the country's economic growth plans and railway transportation is still viewed as the most efficient and affordable means of transportation in the nation.

From the previously allocated RMB470 billion, the Ministry of Railway recently announced a welcomed upward revision for railway infrastructure investment to RMB516 billion, lifting the total planned fixed asset investments from approximately RMB580 billion to RMB630 billion for 2012. These planned investments are part of the Government's "Twelfth Five-Year Plan" (2011-2015) to further develop China's infrastructure network which is expected to buoy the railway sector's performance. In addition, 25 metro projects around the country have received approval for planning and feasibility studies, with estimated investments to reach RMB700 billion.

Commented Mr Patrick Chew, Chief Executive Officer of Midas, "Given the recent upward revisions in railway investments, we remain cautiously optimistic about the industry's mid to long-term outlook. The Group will continue to closely monitor events in the PRC railway sector, and to channel efforts at growing our product segments and look into opportunities in export markets."

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.