BEIJING, Feb. 14 /PRNewswire-Asia/ -- 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 unaudited financial results for its second fiscal quarter of 2009 ended December 31, 2008.
Highlights for the second quarter of 2009
-- Revenues were US$4.5 million, an increase of 7.7% from US$4.2
million in the second quarter of 2008.
-- Gross margin was 9.4%, compared to 20.9% in the second quarter of
2008.
-- Basic and diluted losses per share were US$0.30, compared to basic
and diluted earnings per share of US$0.20 in the same period in 2008.
-- Despite the global economic downturn, the number of ships served
increased to 47 from 44 in the second quarter of 2008.
-- On October 9, 2008, Sino-Global announced a program authorizing the
Company to repurchase up to 10% of its outstanding common stock over
a 12-month period. As of December 31, 2008, Sino-Global had
repurchased 55,100 shares. These purchases reflect the Company’s
confidence in its future growth prospects.
Mr. Cao Lei, Sino-Global’s chief executive officer, said: “The second quarter proved to be a challenging one as the global economic crisis continued to take a toll on global demand for commodities and shipping to and from China. Despite this, we are seeing the results of our expansion strategy, which kept our top line growing in the face of challenging macro conditions. In addition to strategically expanding our business to better serve our clients, we are taking the necessary measures to reduce costs. In fact, we made a number of tough decisions during the quarter, including cutting 20 percent of our work force, decreasing executive salaries and moving into less expensive office space. We believe that these initiatives along with the Central government’s fiscal and monetary measures will improve our bottom line in the quarters to come.”
Financial Results for the Second Quarter of 2009
Revenues
Revenues were US$4.5 million in the second quarter of 2009, an increase of 7.7% from US$4.2 million in the second quarter of 2008.
As a result of the current global economic downturn, fewer ships carried goods to and from China compared to the same period in 2008. Despite the downturn, the number of ships the Company served increased slightly year over year from 44 in the second quarter of 2008 to 47 in the second quarter of 2009. The Company’s newly opened Australia office contributed nine ships to the total. Sino-Global expects that it will continue to earn a substantial majority of its revenues from shipping agency services. The Company has placed considerable focus on the promotion of its shipping agency services business in recent quarters and intends to expand its business scope to related and complementary areas in order to meet growth targets.
Costs of Services
Costs of services were US$4.1 million in the second quarter of 2009, an increase of 23.4% from US$3.3 million in the second quarter of 2008. Costs of services increased faster than revenues, which was due in part to the depreciation of the U.S. dollar against the Chinese yuan (“RMB”) in the same period, from RMB7.4300 to US$1.00 in the three months ended December 31, 2007 to RMB6.8390 to US$1.00 in the three months ended December 31, 2008, an 8.64% percent average year-over-year depreciation of the U.S. dollar against the RMB. Costs of services also increased due to overtime pay made to employees at local ports during the National Day holiday in October.
Gross profit was US$0.4 million in the second quarter of 2009, a decrease of 51.9% from US$0.9 million in the second quarter of 2008. Gross margin was 9.4% in the second quarter of 2009, compared to 20.9% in the second quarter of 2008.
Operating Expenses
General and administrative expenses were US$1.2 million in the second quarter of 2009, an increase of 105.3% from US$0.6 million in the second quarter of 2008. The increase in general and administrative expenses was mainly due to salary expenses used to attract and retain high-caliber personnel, expenses related to becoming a public company, expenses related to business expansion and the implementation of a new information management system, office rental expenses and expenses for legal, accounting and other professional services.
Selling expenses were US$142 thousand in the second quarter of 2009, an increase of 214.2% from US$45 thousand in the second quarter of 2008, largely due to increased business promotion and travel expenses as well as expenses related to the Company’s recently opened Hong Kong and Australia offices.
Operating Profit
Operating loss was US$0.9 million in the second quarter of 2009, compared to operating income of US$0.3 million in the second quarter of 2008. Operating margin was -19.6% in the second quarter of 2009 compared to 6.3% in the same period in 2008.
Financial expenses were US$90 thousand in the second quarter of 2009, compared to financial income of US$67 thousand in the second quarter of 2008. Financial expenses in the second quarter were largely due to foreign exchange losses recognized in the condensed consolidated financial statements, especially for holdings in Australian dollars.
Income tax expenses were US$154 thousand in the second quarter of 2009, compared to an income tax benefit of US$89 thousand in the second quarter of 2008.
Net Income
Net loss was US$0.9 million in the second quarter of 2009, compared to net income of US$0.4 million in the second quarter of 2008. Net margin was -20.1% in the second quarter of 2009, compared to 8.8% in the second quarter of 2008.
Basic and diluted losses per share in the second quarter of 2009 were US$0.30, compared to basic and diluted earnings per share of US$0.20 in the same period in 2008.
Other Select Data
As of December 31, 2008, the Company had US$7.7 million in cash and cash equivalents and short-term investments, compared to US$9.6 million as of June 30, 2008. Net cash used in operating activities and capital expenditures for the second quarter of 2009 was US$1.5 million and US$0.2 million, respectively.
Business Outlook
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 agency 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 shipping agency 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 agency 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 undue reliance on these forward-looking statements, which speak only as of the date hereof. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Sino-Global’s anticipated growth strategies; Sino-Global’s future business development, results of operations and financial condition; expected changes in the Company’s revenues and certain cost or expense items; Sino-Global’s ability to attract customers and leverage its brand; Sino-Global’s timely receipt of payment from customers under new and existing contracts; trends and competition in the shipping and shipping agency industries; the Company’s ability to hire, train and retain qualified managerial and other employees; Sino-Global’s efforts at controlling company expenses; the Company’s ability to develop and market new services in a timely and 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 any expansion of the Company’s current scope of services 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 events or circumstances occurring 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
