Financial Review
The Group recorded a turnover of RMB875.9 million for the 12 months ended 31st December 2007, representing an increase of 23.9% as compared to the previous corresponding period. The Group’s revenue growth was spurred by:
· Increased capacity of alkali-soluble Poly Ethylene Terephthalate (“PET”) chips by 53% to 11,605 tonnes from April 2006; and
· Commencement of production of Combed Yarn with an annual capacity of 6,000
tonnes from May 2006.
The increase in gross profit margin from 26.2% to 28.4% was mainly due to the higher gross profit margins of the alkali-soluble PET chips, combed yarn and conversion of low margin bright and semi-dull PET Chips to higher value higher margin high shrinkage and dye-absorbing PET Chips. Profit before tax grew by 41.8% to RMB227.4 million and net profit grew by 21.8% to RMB164.2 million despite higher taxation of 27%, up from 15% in the previous corresponding period.
C&G also reported a strong net operating cash flow of RMB188.8 million, up 28.7% as compared to that of 2006 RMB146.7 million. “We are pleased with another set of good results. The construction of the plant for Polyester Short Fibre (PSF) of 10,000 tonnes had completed on time, it has commenced production in November 2007. This marks a major milestone for us, as we have completed our production integration from differentiated PET Chips, to PSF to functional Yarns. We expect margin expansion from this integration of production from 2008 onwards. ”
Mr. Cai Junyi
CEO, C&G Industrial
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