CCFH's post-tax earnings hit S$1m

After losing S$1.5m last year.

According to a release, gross profit increased by S$1.9 million from S$0.7 million in 3Q2011 to S$2.6 million in 3Q2012. Gross profit margin increased significantly from 13.5% in 3Q2011 to 34.7% in 3Q2012, mainly contributed by the improved gross profit margin in both ODM Division and the children wear retail business under the Retail Division.

The improvement was mainly due to a decrease in the price of cotton which is the key raw material, and a reversal of allowance for inventory obsolescence of S$0.5 million.

Other income increased by S$0.2 million to S$0.4 million in 3Q2012 as compared to S$0.2 million in 3Q2011, mainly due to the revenue guarantee undertaken by Hannah Holdings Pte Ltd to reimburse the Company for the shortfall amount should the revenue generated by the bedlinen business be less than the operating expenses incurred.

Finance costs decreased by S$45,000 to S$131,000 for 3Q2012 as compared to S$176,000 for 3Q2011, mainly due to reduced interest expense following the repayment of borrowings.

The Group reported other income of S$340,000 in 3Q2012 as compared to S$108,000 for 3Q2011, mainly due to an increase in net gain on foreign exchange.

Income tax income of S$540,000 was reported for 3Q2012 as compared to income tax expense of S$9,000 for 3Q2011, mainly due to the recognition of deductible temporary differences arising from the amortisation of intangible assets.

The Group reported a profit after tax of S$1.0 million for 3Q2012 as compared to a net loss of S$1.5 million for 3Q2011 due to the above reasons.