Midas Holdings’ profit plunged 91% on back of higher finance costs

The group raked in a measly $317k.

Midas Holdings reported disappointing results in Q3. Its profit plunged 91% year on year to $317k (RMB 1.5m), due to higher start-up and finance costs arising from its new plants.

According to OCBC, Midas’ 3Q14 administrative and finance expenses jumped 42.1% and 117.0% to RMB36.5m and 35.5m respectively, eroding the 6.2 ppt gain in gross profit margin of 27%.

“We expect higher start-up and finance costs to continue into 2H15 as we estimate commercial production from the new plants will only gradually commence from 4Q15,” noted OCBC.

Here’s more from OCBC:
Midas Holdings Ltd’s (Midas) 3Q14 results showed huge disappointment as it came in way below our expectation. 

While revenue grew 7.7% YoY to RMB324.2m on the back of higher revenue from its Aluminium Alloy Extruded Products Division, PATMI plunged 91% to RMB1.5m due to higher start-up and finance costs arising from its new plants. 

Midas’ 3Q14 administrative and finance expenses jumped 42.1% and 117.0% to RMB36.5m and 35.5m respectively, eroding the 6.2 ppt gain in gross profit margin of 27.0%. 

A 96.9% drop in share of profits of an associate, Nanjing SR Puzhen Rail Transport Co Ltd (NPRT) further contributed to a lower PATMI.