(Hong Kong, 17th August, 2000) -- Singamas Container Holdings Limited ("Singamas") (Stock code: 0716), one of the world's leading container manufacturers and container depot and mid-stream operators, today announced its interim results for the six months ended 30th June, 2000.
In the first half of 2000, the Group attained a consolidated turnover of US$76,929,000 and a consolidated net profit for the period of US$2,120,000, representing an increase of 30.4% and 88.3% respectively over the same period in 1999. Earnings per share were US 0.46 cent as compared to US 0.25 cent last year.
Mr. Chang Yun Chung, Chairman of Singamas said, "We are pleased to report substantial growth in both turnover and profit. The encouraging results were mainly attributable to the improvement of the Group's manufacturing operations and the positive performance of container depots in the PRC."
Container manufacturing remained the Group's core business, accounting for 80.9% of its turnover. During the period under review, it achieved consolidated turnover of US$62,266,000, 38.6% more than the same period of last year. Profit before taxation and minority interests was US$1,693,000, 303% higher than the same period of last year.
Mr. Chang said, "Higher demand for new container, improved container selling price, stringent cost control and better efficiency primarily accounted for even better profitability. More importantly, the Group's strategy to increase production capacity to achieve economies of scale pays off. Therefore, we managed to boost sales volumes to capture a larger market share and at the same time improving profitability."
Shanghai Reeferco Container Co., Ltd. ("Shanghai Reeferco"), specializing in the production of environment friendly Chlorofluorocarbon free refrigerated containers ("reefers"), managed to turnaround and achieved a small profit as compared to a loss of US$589,000 in the same period of last year. The remarkable result was mainly attributable to the increase in reefer container demand and Shanghai Reeferco's efforts in improving production efficiency, which lowered the operating costs substantially.
In addition, all of the Group's dry freight container manufacturing factories in the PRC and Indonesia have reported growth in both turnover and profit.
During the first half of the year, the Group's container depot operations attained a consolidated turnover of US$9,601,000, decreased by 6.8% from 1999. Despite a decline in sales, the Group's container depots registered a consolidated profit before taxation and minority interests of US$1,224,000 as compared to the same of last year's US$886,000. Better profitability was mainly attributable to the good performance achieved by the Group's container depots in the PRC.
The Group's container depots form a well-established and comprehensive network covering the north to the south along the prosperous coastal cities of the PRC in Dalian, Tianjin, Qingdao, Shanghai, Ningbo and Xiamen. These ports were being ranked as "Top 10 Mainland Ports" in 1999. Located in these regions, the Group's PRC container depots benefited from the strong container throughput, achieving satisfactory performances.
On the other hand, the growing cargo throughput in Hong Kong affected the empty container storage business of the Group's container depots in Hong Kong. In the first half of the year, the Hong Kong container depot operation witnessed a slowdown. Despite a drop in business volume, the Hong Kong depot operations remained profitable and attained a profit before taxation and minority interests of US$128,000 due to improved efficiency and better cost control.
Meanwhile, the mid-stream operation continued to contribute satisfactory results to the Group. It registered a turnover of US$5,062,000 and a profit before taxation of US$778,000, representing 34.1% and 129% increase over the same period of last year, respectively.
Looking into the future, with the improvement in the overall business environment, the Group will maximize the business opportunities by strengthening the Group's PRC container manufacturing and depot network to enhance its competitiveness and market position.
In the light of strong demand for new containers, the Group signed another equity transfer agreement with Xiamen Head Co., Ltd. to acquire an additional 15% equity interest in Xiamen Pacific Container Manufacturing Co., Ltd. ("Xiamen Pacific") in April 2000. The Group's equity interest in Xiamen Pacific increased to 40% after the signing of this agreement. Also, Xiamen Pacific started its second production shift in July 2000, whereby its monthly production capacity is expected to increase from 3,500 TEUs to 5,500 TEUs.
Besides, on 19th July, 2000, Singamas Refrigerated Container Ltd., a subsidiary of the Company and the immediate holding company of Shanghai Reeferco, signed a joint venture agreement with Hyundai Precision & Industry Company Limited ("Hyundai Precision") to upgrade and expand the reefer container manufacturing business in the PRC. As part of the agreement, Hyundai Precision and Shanghai Reeferco have also entered into a technical collaboration agreement for the transfer of the latest reefer design, production engineering, technological know-how and several key production facilities from Hyundai Precision's Ulsan factory to Shanghai Reeferco. Hyundai Precision will also provide marketing assistance in promoting and enlarging Shanghai Reeferco's customer base.
Mr. Chang said, "With the joint efforts of Singamas and Hyundai Precision, the Group believes that Shanghai Reeferco will provide satisfactory returns to the Group in the future."
Singamas currently operates five container manufacturing factories in the PRC and one in Surabaya, the Republic of Indonesia, producing dry freight containers, collapsible flatrack containers, open top containers, bitutainer, Chlorofluorocarbon free refrigerated containers, other specialised containers and container parts. It also operates six container depots in the PRC, located in Dalian, Tianjin, Qingdao, Shanghai, Ningbo and Xiamen and two container depots in Hong Kong. Additionally, it operates a mid-stream operation in Hong Kong.
SINGAMAS CONTAINER HOLDINGS LIMITED (Incorporated in Hong Kong with limited liability) 2000 INTERIM RESULTS ANNOUNCEMENT |
INTERIM RESULTS
The Board of Directors (the "Directors") of Singamas Container Holdings Limited (the "Company") is pleased to announce the unaudited consolidated interim results of the Company and its subsidiaries (together the "Group") for the six months ended 30th June, 2000 together with comparative figures for the corresponding period of 1999 as follows:
Six months ended 30th June,
Notes 2000 1999
US$'000 US$'000
Turnover 2 76,929 58,995
Cost of sales 65,437 49,641
---------- ----------
Gross profit 11,492 9,354
Other operating revenue 1,002 553
Selling and distribution cost (1,667) (2,042)
Administrative expenses (5,592) (5,044)
Other operating expenses (37) -
---------- ----------
Profit from operations 5,198 2,821
Finance costs (2,077) (1,678)
Investment income 273 265
Share of results of associate 301 238
---------- ----------
Profit before taxation 3,695 1,646
Taxation 3 (493) (203)
---------- ----------
Profit after taxation 3,202 1,443
Minority interests (1,082) (317)
---------- ----------
Net profit for the period 2,120 1,126
========== ==========
Earnings per share 4 0.46 cent 0.25 cent
========== ==========
Notes:-
1. Change in accounting policy
In the current year, the Group has adopted Statement of Standard Accounting Practice 1 "Presentation of financial statements" ("SSAP1") issued by the Hong Kong Society of Accountants.
Prior to 1999, pre-operating expenditure was capitalised and amortised, on a straight line basis, over a period of five years from the date of commencement of commercial operations of the subsidiaries. The adoption of SSAP1 has led to a reassessment of this accounting policy. In particular, pre-operating expenditure is not considered to give rise to an identifiable resource from which economic benefits are expected to flow to the Group. Accordingly, such expenditure is now recognised as an expense in the period in which it is incurred. This change in accounting policy has been accounted for retrospectively. The comparative statements for 1999 have been restated to conform to this changed policy.
2. Turnover
Turnover represents sales, less returns and allowances, from container manufacturing, container depot and mid-stream operations.
3. Taxation
Hong Kong profits tax has not been provided as the Company and its subsidiaries in Hong Kong did not have any assessable profit for the six months ended 30th June, 2000. Taxation on overseas profits has been calculated on the estimated assessable profits for the period at the rates of taxation prevailing in the countries in which the Group operates. The taxation charge is made up as follows:
2000 1999
US$'000 US$'000
Company and subsidiaries:
Overseas taxation 493 203
======= =======
4. Earnings per share
The calculation of earnings per share is based on net profit for the period of US$2,120,000 (1999: US$1,126,000) and 456,001,760 ordinary shares in issue (1999: 456,001,760 ordinary shares) throughout the period. Diluted earnings per share are not presented as the exercise prices of the Company's outstanding share options were higher than average market price of shares for both periods.
The adjustment to comparative earnings per share, arising from the change in accounting policy shown in note 1 above, is as follows:
Reconciliation of 1999 earnings per share:
US cent
Reported figure before adjustment 0.14
Adjustment arising from the write-off of
pre-operating expenditure 0.11
-------
Restated 0.25
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