Ocean Sky net profit ballooned by 17% to $10.7m

FY2012 saw more "disciplined" cost management.

In a release, Mainboard-listed Ocean Sky International Limited’s (Ocean Sky) announced that its net profit for the financial year ended 31 December 2012 (FY2012) increased 17.0% to US$10.7 million as compared to US$9.1 million for the financial year ended 31 December 2011 (FY2011).

For FY2012, the Group is proposing a Final Dividend of 0.8 Singapore cents per ordinary share to reward shareholders for their continued support to the Group.

The Group’s revenue decreased from US$291.2 million in FY2011 to US$255 million in FY2012 mainly due to the lower quantity shipped, and lower fabric prices which resulted in reduced Freight On Board (FOB) unit prices. Despite the 12.4% decline, the Group’s gross profit increased to US$46.1 million in FY2012 from US$41.3 million in FY2011, which was an increase of 390 basis points in gross profit margin. The increase in gross profit is largely due to increased sales of higher margin items, improved production efficiency and more goods sold on Delivered Duty Paid (DDP) term.

The Group’s distribution expenses for FY2012 increased to US$10.8 million from US$6.4 million for FY2011 due to more shipments on DDP term. However, administrative and other operating expenses and finance costs decreased by 2.8% and 29.7% respectively. The Group’s associate, Ang Tong Seng Brothers Enterprises Pte. Ltd., in which the Group has a 30% stake, made a maiden contribution of US$46,000 to the Group’s profit before income tax.

Commenting on the Group’s FY2012 financial performance, Ocean Sky’s Executive Chairman and CEO, Mr Edward Ang said, “Our disciplined cost and operational management, combined with a falling cotton price, has enabled us to improve our gross profit margins. As such, in FY2012, despite a lower revenue, we have been able to deliver a higher net profit to shareholders.”

Overall, Ocean Sky’s net profit for FY2012 increased 17% to US$10.7 million from US$9.1 million, with an improvement of 110 basis points in net profit margin.