BEIJING, Nov. 5 /Xinhua-PRNewswire/ -- Sino-Global Shipping America, Ltd. (Nasdaq: SINO) ("Sino-Global" or the "Company"), a leading, non-state-owned provider of shipping agency services operating primarily in China, today announced its selected audited financial results for its first fiscal quarter of 2009 ended September 30, 2008.
Highlights for the first quarter of 2009
-- Revenues were US$5.1 million, an increase of 27.9% from US$4.0 million
in the first quarter of 2008.
-- Operating loss was US$0.5 million, compared to operating income of
US$0.3 million in the first quarter of 2008.
-- Net loss was US$0.4 million, compared to net income of US$0.2 million
in the first quarter of 2008.
-- Basic and diluted losses per share were US$0.19, compared to basic and
diluted earnings per share of US$0.11 in the same period in 2008.
-- On July 3, 2008, Sino-Global established Sino-Global Australia, a
wholly-owned operating subsidiary in Perth, Australia. On August 1,
2008, Sino-Global signed an agency agreement with Monson Agencies
Australia. Under the agreement, both agencies will provide shipping
agency services to each other's clients under their respective brands
in both Chinese and Australian ports.
-- On August 28, 2008, Sino-Global established a new branch in Zhoushan,
Zhejiang province, China. The establishment of the Zhoushan branch
gives Sino-Global a presence in six ports in China and will enable the
Company to provide a full range of services to companies doing business
in the Zhoushan port. Sino-Global is able to provide a consistently
high quality of shipping agency services in each of China's 76 ports
through its own six branch offices and contractual arrangements in all
ports in Mainland China it does not have its own branch offices.
-- On September 22, 2008, Sino-Global incorporated its second wholly-owned
operating subsidiary outside of Mainland China. Sino-Global Shipping HK
Limited will become Sino-Global's control and management center for
southern Chinese ports and will enable Sino-Global to extend its
offering of comprehensive shipping agency services to vessels going to
and from one of the world's busiest ports.
"The substantial costs associated with becoming a public company and costs of services continued to affect our bottom line during the quarter," said Mr. Zhang Mingwei, Sino-Global's chief financial officer. "These costs are factored into our long-term plan, and we are proactively taking the necessary near-term steps in order to reduce our costs and mitigate our foreign exchange risk."
Mr. Cao continued, "Despite a slowing global economy and weakened Chinese export sector, we remain confident that our high-quality shipping agency services will become ever more important as clients turn to our solutions to cut costs and further simplify the shipping process. At the same time, we are prudently watching our costs, leveraging our partnership model in select international markets and executing according to our growth strategy of expanding and consolidating the industry as attractive opportunities present themselves."
Financial Results for the First Quarter of 2009
Revenues
Revenues were US$5.1 million in the first quarter of 2009, an increase of 27.9% from US$4.0 million in the first quarter of 2008.
Sino-Global expects that it will continue to earn a substantial majority of its revenues from shipping agency services. Despite a drop in total number of ships served when compared to the year-ago period, revenue growth was driven by a higher percentage of large ships served in the first quarter of 2009.
Costs of Services
Costs of services were US$4.5 million in the first quarter of 2009, an increase of 38.8% from US$3.2 million in the first quarter of 2008. The fluctuating value of the Renminbi against the U.S. dollar negatively impacted gross margins in the first quarter of 2009. Costs of services increased faster than revenues, which was largely due to the depreciation of the U.S. dollar against the Renminbi in the same period, from RMB7.5108 to US$1.00 in 2007 to RMB6.8183 and US$1.00 in 2008, respectively, representing a 7.85% increase of the Renminbi against U.S dollar over the year.
Gross profit was US$0.6 million in the first quarter of 2009, a decrease of 20.1% from US$0.7 million in the first quarter of 2008. Gross margin was 11.6% in the first quarter of 2009, compared to 18.6% in the first quarter of 2008.
Operating Expenses
General and administrative expenses were US$1.0 million in the first quarter of 2009, an increase of 194.6% from US$0.3 million in the first quarter of 2008. The increase in general and administrative expenses was mainly due to expenses related to becoming a public company on the NASDAQ Capital Market, additional expenses incurred in establishing a wholly-owned foreign subsidiary, Trans Pacific, and an increase in headcount, depreciation expenses, office rental expenses and expenses for legal, accounting and other professional services.
Selling expenses were US$95 thousand in the first quarter of 2009, an increase of 93.3% from US$49 thousand in the first quarter of 2008, due to increased commission and travel expenses. The Company expects selling expenses to increase in absolute amount and possibly as a percentage of total net revenues in the near-term, due to an increasing number of ships served and increased price competition in service charges.
Operating Profit
Operating loss was US$0.5 million in the first quarter of 2009, compared to operating income of US$0.3 million in the first quarter of 2008. The notable decrease in operating profit was due to an increase in costs of services and general and administrative expenses. Operating margin was -10.3% in the first quarter of 2009 compared to 8.7% in the same period in 2008.
Financial income was US$16 thousand in the first quarter of 2009, compared to a loss of US$24 thousand in the first quarter of 2008. The net financial income comes largely from interest income from cash deposits in banks, mitigated by foreign exchange losses recognized in the consolidated financial statements.
Income tax expenses were US$73 thousand in the first quarter of 2009, a decrease of 39.2% from US$119 thousand in the first quarter of 2008.
Net Income
Net loss was US$0.4 million in the first quarter of 2009, compared to net income of US$0.2 million in the first quarter of 2008. Net margin was -8.4% in the first quarter of 2009, compared to 4.8% in the first quarter of 2008.
Basic and diluted losses per share in the first quarter of 2009 were US$0.19, compared to basic and diluted earnings per share of US$0.11 in the same period in 2008.
Other Selected Data
As of September 30, 2008, the Company had US$9.3 million in cash and cash equivalents and short-term investments, compared to US$0.6 million in the first quarter of 2008. Net cash used in operating activities and capital expenditures for the first quarter of 2009 was US$0.2 million and US$0.1 million, respectively.
Business Outlook for the First Quarter of 2009
Sino-Global maintains its full year 2009 guidance with revenues expected to be in the range of US$22.6 million to US$24.9 million, representing annual growth of 50% to 65% over 2008. This forecast is a current and preliminary view and is subject to change.
About Sino-Global Shipping America, Ltd.
Registered in the United States in 2001 and operating primarily in Mainland China, Sino-Global is a leading, non-state-owned provider of high-quality shipping services. With local branches in six of China's 76 ports and contractual arrangements in all those where it does not have branch offices, Sino-Global is able to offer efficient, high-quality services to shipping companies entering Chinese ports. With a subsidiary in Perth, Australia, where it has a contractual relationship with a local shipping agency,
Sino-Global provides complete shipping agent services to companies involved in trades between Chinese and Australian ports. Sino-Global also operates a subsidiary in Hong Kong, China, to provide comprehensive shipping agent services to vessels going to and from one of the world's busiest ports.
Sino-Global provides ship owners, operators and charters with comprehensive yet customized shipping services including intelligence, planning, real-time analysis and on-the-ground implementation and logistics support. Sino-Global has achieved both ISO9001 and UKAS certifications.
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to purchase any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Any statements contained in this release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties as identified in Sino-Global's filings with the Securities and Exchange Commission. Actual results, events or performance may differ materially. Readers are cautioned not to place undo reliance on these
cost-effective manner; the expected growth of the Chinese economy and the shipping industry in particular; fluctuations in currency exchange rates; applicable tax rates; the continued viability of the partnership model of expansion; and Sino-Global's ability to leverage our subsidiaries located outside the U.S. for tax and revenue benefits. In addition, Sino-Global cannot guarantee that its establishment of branch offices in Zhoushan, subsidiaries in Australia and Hong Kong, or contractual arrangements with other shipping agencies like Monson Agencies Australia will result in the anticipated, or any, benefits to the Company. Sino-Global undertakes no obligation to publicly release the results of any revisions to these
forward-looking statements that may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
For investor and media inquiries, please contact:
Ms. Apple Liang
Sino-Global, Beijing
Tel: +86-10-6439-1888
Email: ir@sino-global.net
Ms. Flora Tian
Ogilvy Financial, Beijing
Tel: +86-10-8520-6524
Email: Flora.Tian@ogilvy.com
