Tuesday, April 13, 2021
 
Columnist
Martin Hennecke
 
HUA LIEN INT'L
HKEx Stock Code : 00969 
 
Corporate Profile
Principally engaged in provision of (i) facilities, raw materials and goods supply services; (ii) management and technical staff; (iii) related consulting services on construction; and (iv) contract manufacturing services; to the sweetener and ethanol business.

Business Review - For the year ended December 31, 2012

For the year ended 31st December 2012, the Group recorded turnover of approximately HK$206.2 million (2011: HK$195.1 million). The approximate HK$11.1 million increase in turnover was resulting from the approximate HK$34.7 million increase in orders for agricultural and industrial equipments and accessories, chemical materials, steel, motor vehicles, agricultural and industrial consumables and other products by customers in Madagascar and Benin as their increase in production have drove up the demand of those items, an approximate HK$16.7 million decrease in agricultural and industrial machinery orders since the construction and rehabilitation projects of customers in Madagascar had completed last year and an approximate HK$6.9 million decrease in fertilizer sales due to the slowdown of orders from customers in Madagascar as the inventory of some fertilizers remain high and the replenishment of these yet carried out.

Gross profit for the year ended 31st December 2012 increased by approximately HK$6.6 million to approximate HK$98.4 million (2011: HK$91.8 million) and the gross profit increase by about 1% to approximate 48% for 2012 (2011: 47%). The increase in gross profit was due to the increase in sales of higher gross profit agricultural and industrial equipments and accessories and the decrease in the sale of lower gross profit agricultural and industrial machinery and fertilizers during the year.

The net loss for the period was approximately HK$9.5 million (2011: HK$4.9 million). Basic loss per share for the year ended 2012 was HK0.58 cents (2011: HK0.37 cents). The net loss for the year mainly came from the profit from operations of approximate HK$38.8 million was lower than the finance costs on the effective interest expense on convertible notes of approximate HK$48.3 million and a net loss of approximate HK$9.5 million resulted.

Excluding those non-cash items of amortisation of intangible assets and finance costs, the Group is trading profitably and this indicated by positive operating cash flows before movement in working capital of approximate HK$59 million (2011: HK$60.5 million).

During the period under review, the Group only had one identified segment activities of supporting services to sweetener and ethanol business and all the customers were located in Africa, which recorded a turnover of approximate HK$206.2 million (2011: HK$195.1 million) and the operating profit of this segment was approximately HK$44.4 million (2011: HK$42.6 million). The review of performance of this segment had already covered in above sections.

Business Outlook - For the year ended December 31, 2012

Looking ahead, the turnover from supporting services for sweetener and ethanol business currently was lower than the same period last year as some inventory items of our customer remain high but we expects the orders momentum will pick up later this year when the inventories level of these items are getting lower. Reference is made to circulars dated 4th March 2013, as independent shareholders have approved the 2013-2014 Jamaica Supply and Service Agreement, Addendum and 2013-2014 Revised Annual Caps for the Continuing Connected Transactions at CCT EGM, the supporting services for sweetener and ethanol business will benefit as it can extend its service to Jamaica and to achieve the intended synergy by lower sourcing cost through volume discount.

For the progress of ethanol biofuel project of Benin JV in Republic of Benin, the construction site preparation works are undergoing and the trial run is expected to be in the first quarter of 2014.

For the current business outlook of the future Jamaica Sugar Industry Project for 2012-2013 crushing season, even the quantity of order on hand for raw sugar and molasses is lower than that of last crushing season because the decrease in rainfall had affected the productivity of sugarcane and thereby, availability of sugarcane for crushing and raw sugar and molasses for sales but this have mitigated by an increase of their respective average order price because of the change in sales channels this crushing season. The costs of sugar production in this crushing season may be higher than last season due to the decline in sugarcane availability would result in an increase in sugarcane costs and a lower capacity use thus a lower fixed cost absorption could cause the fixed cost per unit to rise.

Source: Hua Lien Int'l Hldg (00969) Annual Results Announcement
Chairman Tang Jianguo Issued Capital (shares) 2,191M
Par Value HKD 0.1 Market Capitalisation (HKD) 855M
 
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