YHI International net profit drops 70% to S$3.5m in 1HYF2013

Weak global demand hits firm hard.

Mainboard-listed alloy wheels manufacturer YHI International Limited (YHI) reported revenue of S$250.4 million for the first six months ended 30 June 2013 (1HFY2013) and a net profit attributable to equity holders of the company (net profit) of S$3.5 million. This compares with the revenue of S$277.4 million and net profit of S$11.7 million in the same period last year (1HFY2012).

"As the global economy continued to be weak, demand for the Group’s products in both the distribution and manufacturing segments has weakened correspondingly. As a result, YHI registered a lower revenue and net profit in the period under review," YHI explained in a release.

Revenue from the distribution segment, which makes up of 74.9 % or S$187.6 million of the total revenue, remains as the main driver of the Group’s turnover in 1HFY2013. The manufacturing segment, which makes up the balance of 25.1 % registered a revenue of S$62.7 million for the period.

Gross profit for 1HFY2013 reduced by 16.5% from S$ 64.5 million in 1HFY2012 to S$53.8 million, which is in line with the lower revenue achieved in the period under review. The Group’s gross profit margins declined to 21.5% from 23.2% in tandem with lower margins from the distribution and manufacturing business segments.

Overall operating expenses of the Group in 1HFY2013 remained relatively stable as compared to the same period last year. Slight increase in the expenses were seen under the distribution expenses, where it rose about 4.6% this period due to higher staff costs. On the other hand, the Group saw a decrease in its administrative costs and financing costs, which were mainly due to the lower bonuses accrued and lower borrowings in certain subsidiaries for the period respectively.

Earnings per share were 0.6 Singapore cent for the first half ended 30 June 2013 compared with 2.0 Singapore cent last year.

Executive Chairman and Group Managing Director, Mr Richard Tay said: “We believe that the recovery of the global economy will continue to be weak with very moderate signs of improvement. As such, the business and operating environments in the markets which we have operations in remains challenging as we experienced slowdown in orders from some of our customers. While we are mindful of the uncertainties in the global economic outlook, we have taken the appropriate measures to maintain a tight rein on our cost and at the same time, prudently growing our businesses.”