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Alltronics Achieves Turnaround in 2015 Interim Results
Continues to Expand Electronic Products Range;
Strives to Explore More Energy Saving Products Business Opportunities
HONG KONG, Aug 31, 2015 - (ACN Newswire) - Alltronics Holdings Limited ("Alltronics" or the "Group") (Stock code: 833), a leading electronic products manufacturer, B5 biodiesel products supplier as well as a provider of energy-saving business solutions, has today announced its interim results for the six months ended 30 June 2015 ("1H 2015"), which saw a turnaround. Net profit attributable to owners of the Company recorded HK$22.8 million (1H 2014: loss attributable to owners of the Company: HK$3.8 million). The Group's turnover amounted to HK$436.2 million. Gross profit totalled HK$81.2 million with gross profit margin increased by 0.8 percentage points to 18.6% (1H 2014: 17.8%).
Business Review
Revenue from the sales of electronic products, including finished electronic products, plastic moulds, plastic and other components for electronic products, amounted to HK$432.2 million (1H 2014: HK$479.7 million). The decrease was mainly due to the drop in sales of finished electronic products, a result of the slowdown of orders from customers in the United States and Hong Kong. On the other hand, sales revenue from plastic moulds and components, and other components for electronic products increased by HK$8.4 million and HK$2.6 million respectively during the review period.
During the period under review, demand for the Group's biodiesel products remained at low levels, leading to a 62.0% drop of the segmental sales revenue, reaching HK$2.9 million. As a result of the continuous decline of global oil commodity prices, the unit selling price for biodiesel products had to be lowered. Furthermore, biodiesel products will be less attractive to customers when oil commodity prices drop and there is less incentive for them to shift from fossil-based diesel to biodiesel products.
As for the energy saving business, total revenue from this segment was HK$1.1 million (1H 2014: HK$2.7 million). During the review period, the LED lighting equipment project (the "Suning EMC Project") with Suning Commerce Group Co., Ltd. ("Suning") was running smoothly, with over 100 Suning retail stores completed the installation work. The inspection procedures for these retail stores will be completed in 2H 2015. In addition, the Group has also completed the installation work at a hotel in Beijing, which is operated by HNA Group Co., Ltd. ("HNA Group"). The inspection procedures at this hotel are expected to be done in 2H 2015. Regarding the energy efficient gas stoves business, approximately 20 energy efficient gas stoves had been installed for customers as of 30 June 2015, and the Group expects to install approximately 50 energy efficient gas stoves in 2H 2015.
Market Analysis
The United States remains as the Group's largest market, occupying approximately 54.6% of the total turnover of the Group as of 30 June 2015. Sales in Hong Kong market reduced by HK$40.2 million, while sales in European market rose by HK$23.5 million. As for other geographical locations, sales had remained stable in 1H 2015.
Prospects
In view of the recent fluctuations in the global stock markets and foreign exchange rates, the Group foresees that the global economic environment will remain uncertain in 2H 2015. Factors such as the risk of the exchange rate fluctuation of Renminbi against United States dollars and Hong Kong dollars; the continuous upward adjustment on the minimum wage levels in the PRC; and the risk of global inflation will continue to affect the performance of the Group's electronic products segment.
Despite the volatile business environment, Alltronics is making great efforts in extending the electronic products range, expecting to develop it as a stable income stream for the Group. In August 2015, the Group has entered into a cooperative agreement with a Shenzhen subsidiary of China Unicom (Hong Kong) Limited to develop Wi-Fi services and act as a sales agent for China Unicom 4G service plans in Shenzhen. Pursuant to the agreement, Alltronics will invest, build and manage the Wi-Fi facilities for China Unicom and plans to target the factories in Shenzhen as pilot locations in the first stage. On the other hand, negotiations with potential customers for medical equipment are in progress and product samples had been sent to potential customers for evaluation and approval. The demand for the Group's irrigation controllers and other electronic products will remain to be strong. Regarding the Group's 49% owned associate which is established in the PRC for manufacturing and sale of printers and other accessory products, its factory that located at Yi Chun had commenced trial production and formal orders are expected during the third quarter of 2015.
With regards to the biodiesel products segment, the Group will continue to exploring new customers in Hong Kong for its biodiesel products, to help improving the air quality and to create greener environment for the local communities.]
In respect of the energy saving products segment, the Group will continue the installation work at other Suning retail stores in 2H 2015. The installation work and inspection procedures in approximately another 200 Suning retail stores are expected to be completed during 2H 2015. The Group will also continue its negotiation with HNA Group for the provision of energy saving business solutions to other hotels. In addition, the Group expects to install approximately 50 energy efficient gas stoves during 2H 2015.
Mr. Lam Yin Kee, Chairman of Alltronics concluded, "To cope with the challenging market environment, we will continue to employ proven cost control measures, and to raise efficiency and enhance profitability. Moreover, we will strive to explore more business opportunities for energy saving projects with potential customers in both Hong Kong and the PRC. Last but not least, we will strive to expand the electronic products range, thus leading towards the further diversification of income streams."
Contact:Strategic Financial Relations Limited
Vicky Lee
Tel.: +852 2864 4834
Email : vicky.lee@sprg.com.hk
Katrina Leung
Tel.: +852 2864 4857
Email : katrina.leung@sprg.com.hk
Hawaii He
Tel.: +852 2864 4847
Email : hawaii.he@sprg.com.hk
Fax: +852 2527 1196
Source: Alltronics Holdings Limited
Sectors: Daily Finance
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