Homepage
PR Newswire
07-05-2011, 06:49 AM
(This post was last modified: 23-10-2013, 02:18 PM by CityFarmer.)
May 7, 2011
Hsu Fu Chi's Q3 profit drops 16.5% to $39m
By Dennis Chan , DEPUTY MONEY EDITOR
SINGAPORE-LISTED Chinese cake and candy maker Hsu Fu Chi International yesterday reported a 16.5 per cent drop in third-quarter net profits to 205.7 million yuan (S$39 million).
Revenue for the three months ended March 31 fell by a marginal 1.2 per cent to 1.51 billion yuan.
This was attributed to a shorter Chinese New Year sales period and a decrease in sales volume following a price hike in the group's products.
Despite the price hike, gross profit margin was 43.4 per cent, which was 10.1 per cent lower than that of the previous corresponding period.
This was due mainly to the increase in raw material prices and labour wages.
Other income rose by 20.8 per cent to 8.8 million yuan, thanks to a research and development grant from the provincial government of Dongguan.
Financial income more than quadrupled to 8.1 million yuan from 1.9 million yuan previously, due mainly to an increase in interest income as a result of higher bank balances.
On the expense side, selling and distribution costs fell by 17.4 per cent to 392.7 million yuan.
This is because transportation expenses and slotting fees had been booked in the previous quarter as Chinese New Year season this year came earlier than usual.
Slotting fees are monetary incentives that suppliers pay to the hypermarkets to obtain extra space to display their merchandise.
General and distribution expenses climbed by 24.4 per cent to 57.6 million yuan as a result of higher salaries.
Earnings per share eased to 25.87 fen from 30.96 fen previously, while net asset value per share climbed to 3.69 yuan from 3.59 yuan as of June 30 last year.
For the nine months to March 31, net profit was 17.6 per cent higher at 675.9 million yuan, while revenue rose 23 per cent to 4.37 billion yuan.
During the period under review, Hsu Fu Chi said the major challenges it had faced were rising raw material prices and labour costs.
The tax incentives for subsidiary Dongguan Hsu Chi - at a preferential income tax rate of 15 per cent - expired at the end of last year.
'The increasing operational costs and higher income tax rate would have an impact on the group's financial performance in 2011, which would result in a decrease in both gross and net profit margins,' the company warned.
The group will continue to enhance its operational efficiency, machine automation, product branding, pricing and marketing strategies to mitigate the impact, it added.
(Not Vested)
Hsu Fu Chi's Q3 profit drops 16.5% to $39m
By Dennis Chan , DEPUTY MONEY EDITOR
SINGAPORE-LISTED Chinese cake and candy maker Hsu Fu Chi International yesterday reported a 16.5 per cent drop in third-quarter net profits to 205.7 million yuan (S$39 million).
Revenue for the three months ended March 31 fell by a marginal 1.2 per cent to 1.51 billion yuan.
This was attributed to a shorter Chinese New Year sales period and a decrease in sales volume following a price hike in the group's products.
Despite the price hike, gross profit margin was 43.4 per cent, which was 10.1 per cent lower than that of the previous corresponding period.
This was due mainly to the increase in raw material prices and labour wages.
Other income rose by 20.8 per cent to 8.8 million yuan, thanks to a research and development grant from the provincial government of Dongguan.
Financial income more than quadrupled to 8.1 million yuan from 1.9 million yuan previously, due mainly to an increase in interest income as a result of higher bank balances.
On the expense side, selling and distribution costs fell by 17.4 per cent to 392.7 million yuan.
This is because transportation expenses and slotting fees had been booked in the previous quarter as Chinese New Year season this year came earlier than usual.
Slotting fees are monetary incentives that suppliers pay to the hypermarkets to obtain extra space to display their merchandise.
General and distribution expenses climbed by 24.4 per cent to 57.6 million yuan as a result of higher salaries.
Earnings per share eased to 25.87 fen from 30.96 fen previously, while net asset value per share climbed to 3.69 yuan from 3.59 yuan as of June 30 last year.
For the nine months to March 31, net profit was 17.6 per cent higher at 675.9 million yuan, while revenue rose 23 per cent to 4.37 billion yuan.
During the period under review, Hsu Fu Chi said the major challenges it had faced were rising raw material prices and labour costs.
The tax incentives for subsidiary Dongguan Hsu Chi - at a preferential income tax rate of 15 per cent - expired at the end of last year.
'The increasing operational costs and higher income tax rate would have an impact on the group's financial performance in 2011, which would result in a decrease in both gross and net profit margins,' the company warned.
The group will continue to enhance its operational efficiency, machine automation, product branding, pricing and marketing strategies to mitigate the impact, it added.
(Not Vested)
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
