Midas Holdings net profit up 71.3% to RMB47.7m

See which division drove the growth.

Midas Holdings Limited (Midas) recorded net profit attributable to equity holders or net profit of RMB47.7 million for the financial year ended December 31, 2013 (FY2013), up 71.3% from RMB27.8 million in the previous financial year (FY2012).

Group revenue rose 32.0% from RMB869.5 million in FY2012 to RMB1.15 billion in FY2013. This was mainly driven by higher business volume from its Aluminium Alloy Extruded Products Division, which resulted in a 32.4% gain in revenue to RMB1.10 billion. This division accounted for approximately 95.7% of total revenue for FY2013.

Within the division, the Transport Industry, which included the supply of aluminium alloy extrusion profiles for freight wagons, was the largest revenue contributor, accounting for 67.1% of its FY2013 revenue. The “Others” segment, which included mainly the supply of aluminium alloy rods and other specialised profiles for industrial machinery, made up 25.8% of revenue to the Aluminium Alloy Division. Revenue contribution from the Power Industry contributed the remaining 7.1%.

The Group’s overall gross profit margin was 24.5% for FY2013, compared to 28.9% for FY2012. The Aluminium Alloy Extruded Products Division registered gross profit margin of 24.8% for FY2013, compared to 29.4% for FY2012. This was due to a change in product mix in FY2013, which included sales of aluminium alloy extrusion profiles for freight wagons, that typically command lower processing fees.

In line with the higher business volume, selling and distribution expenses rose 35.0% to RMB54.5 million in FY2013, up from RMB40.4 million in FY2012. This was a result of higher transportation and travelling expenses.

Approximately RMB57.8 million (FY2012: RMB25.9 million) of the interest on bank borrowings that were used to finance the construction of property, plant and equipment for the new production lines were capitalised.

The Group’s associated company, Nanjing SR Puzhen Rail Transport Co., Ltd (NPRT), contributed RMB13.6 million in FY2013. This was a reversal from a share of loss recorded in the previous year. NPRT’s improved performance was attributed mainly to more train car deliveries during the period under review.

The Group’s balance sheet has cash and cash equivalents of RMB1.05 billion as at December 31, 2013, up from RMB547.0 million as at December 31, 2012.

In appreciation to the support of its shareholders, the Group has proposed a final cash dividend of 0.25 Singapore cent per ordinary share. In total, this works out to a total dividend payout amounting to 0.50 Singapore cent per ordinary share for FY2013.

The PRC government’s continued support to grow China’s transportation network will see the China Railway Corporation making approximately RMB630.0 billion in railway fixed-asset investment in 2014.

Patrick Chew, Chief Executive Officer of Midas, said, “In FY2013, Midas secured approximately RMB812.5 million in orders from international and PRC customers, which included our first high-speed train contract since 2011. We remain optimistic about the outlook of China’s railway industry over the mid to long-term. With Midas’ leadership position in the PRC market and NPRT’s capabilities, we are confident that the Group will be able to tap growth opportunities in the PRC railway sector, other product segments and in export markets.”