Latitude Tree profits up to S$11.5 M on higher sales

Latitude Tree International Group Ltd. reported Thursday a 126.4% surge in net profit to S$11.5 million for the six months ended December 31, 2009 (HY2010).

This is from profits of S$5.1 million in HY2009 for the newly listed Latitude Tree, a manufacturer of lifestyle wooden home furniture.

The bottom-line performance of S$11.5 million in HY2010 has surpassed the net profit of S$9.3 million achieved in FY2009.

This was driven mainly by a 15.0% increase in revenue to S$77.7 million in HY2010, as compared to that in HY2009, higher sales of better margin products, improved production efficiency and lower per unit factory costs and raw material costs.

Said Mr. Lin Tzu-Keng, Chief Executive Officer and Executive Director of Latitude Tree, "We are pleased to have achieved a good set of results shortly after our recent listing on SGX Catalist in August last year. We were also well equipped to meet customers’ expectations through a wider product range and value added services. These, coupled with a higher production output, contributed to a positive financial performance."

The company recorded a revenue of S$77.7 million for HY2010, representing an increase of 15.0% as compared to the previous corresponding period HY2009.

Its revenue increased mainly due to increase in production output of the second factory in Vietnam, the increase in orders from pent-up demand of furniture and sales from the broadening of the Group’s product range.

Due to an increase in profit from operations, the company's net profit rose by S$5.1 million to S$11.5 million for HY2010.

Gross profit increased by 72.7% from S$9.8 million in HY2009 to S$16.9 million in HY2010, attributed to higher sales of better margin products, higher productivity due to improved product efficiency, lower factory costs per unit as a result of higher production output, as well as a lower raw materials cost.

Its operating costs, which comprise distribution costs, administrative expenses and other operating expenses, amounted to S$4.9 million in HY2010, which was 35.4% higher than in HY2009.

This was attributed to the increase in administrative expenses of approximately S$0.9 million due to the Group’s listing expenses.

As at December 31, 2009, the group’s current assets increased by S$35.5 million.

Cash and bank balances increased to S$24.0 million, largely due to the proceeds from the issuance of new shares and net cash generated from operating activities.

Net cash from operating activities increased by S$5.8 million to S$9.0 million for HY2010.

Overall, the Group’s cash and cash equivalents increased by S$19.0 million to S$28.0 million as at December 31, 2009.

"From now up till the end of the financial year, despite a slow recovery of the global economy, we anticipate the current demand for furniture to sustain," said Mr. Lin.