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Financial Perfomance
| - | Group |
Variance |
|
| - | 31 December 2006 RMB'000 |
31 December 2005 RMB'000 |
% Increase/ (Decrease) |
| Revenue | 157,911 | 242,020 | (34.8) |
| Cost of Sales | (147,684) | (236,514) | (37.6) |
| Gross profit | 10,227 | 5,506 | 85.7 |
| Gross profit margin | 6% | 2% | - |
| Other income | 98,404 | 3,090 | nm |
| Finance income | 1,272 | 1,886 | (32.6) |
| Administrative expenses | (18,691) | (44,570) | (58.1) |
| Selling and distribution expenses | (5,802) | (42,188) | (86.2) |
| Finance costs | (11,708) | (21,366) | (45.2) |
| Other operating expenses | (958) | (374) | nm |
| Share of results of joint venture | 1,968 | - | nm |
| Profit / (loss) before taxation | 74,712 | (98,016) | nm |
| Income tax expense | - | - | - |
| Net profit / (loss) for the year | 74,712 | (98,016) | nm |
Return to shareholders
Earning per ordinary shares (EPS)The basic and diluted EPS for FY 2006 was RMB 44.17 cents (2005: negative RMB 57.95), an increase of RMB 102.12 cents which was mainly due to the gain on disposal of two subsidiaries as a result of the Restructuring Exercise.
Net Asset Value Per Share
The increase in net asset value per share from RMB 9.4 cents in FY 2005 to RMB 36.2 cents in FY 2006 was a result of profit generated in FY 2006.
Dividends
As the Group has just completed its Restructuring Exercise, cash is much needed for its operating and upgrading program. Thus, the Board is not recommending payment of dividend for the year.
Turnover
The Group’s turnover for FY 2006 has decreased by 35% to RMB 158 million (2005:RMB 242 million). The decreased turnover was due to the disposal of two wholly-owned subsidiaries, namely Sanmenxia Lakeside Fruit Juice Co., Ltd (“SLFJ”) and New Lakeside (Sanmenxia) Co., Ltd (“NLC”) in August 2006 which contributed about 43% (2005: 82%) of the total sales volume for FY 2006.
Geographically, sales in the People’s Republic of China (“PRC”) accounted for 47.51% of total revenue, Europe 35.25%, USA 11.11% and the remaining 6.13% is contributed by sales in Asia, Russia, Australia, South Africa, Saudi Arabia, New Zealand and Serbia.
Revenue for the year of the Group’s apple pomace and animal feed (“APAF”) business were stable with sales amounting to RMB 11,239,000 (FY 2005: RMB 11,157,000). With the disposal of NLC, the Group’s animal feed production is continued at the factories of Xuzhou and Yuncheng.
The subsidiaries have contracted with a third party corporation to be the sales agent of the Group’s Fruit Juice concentrate for the pressing season 2006/2007. With its strong marketing relationship with oversea customers, the Group is able to continue keeping its market share of this industry.
Financial Results
The Group has turned into profit of RMB 74.71 million from the loss of RMB 98.02 million in FY 2005. The turnaround was mainly attributable to the restructuring of the Group by disposing of two subsidiaries as follows:
- gain on disposal of two subsidiaries amounting to RMB 86.96 million; and
- gain on disposal of assets classified as held for sale and property, plant and equipment to joint venture (“the JV Company”) with SDIC Zhonglu Fruit Juice Co., Ltd. by the two disposed subsidiaries of RMB 10.79 million.
The JV Company with SDIC Zhonglu Fruit Juice Co., Ltd. was formed in April 2006, and started operation in June 2006 has also contributed 50% share of profit amounting to RMB 1.97 million for year ended 31 December 2006.
Better cost control by the new management after the restructuring exercise has also contributed to the better result as follows:
- decrease in administration expenses by 58% to RMB 18.69 million (2005:RMB 44.57 million) as a result of
- decrease in staff’s salaries and wages of RMB 2.03 million;
- directors’ salaries decreased due to the resignation of 3 directors;
- depreciation of office buildings of the disposed subsidiaries has been reduced; and
- other manpower costs such as staff pension, welfare fund and insurance have been reduced.
- decrease in sales and distribution expenses by RMB 36.39 million (2006:RMB 5.80 million, 2005:RMB 42.2 million). The subsidiaries have contracted with a third party corporation to handle the entire sales for the pressing season 2006/2007 with the cost of selling and distribution borne by the third party corporation; and
- decrease in finance costs of RMB 9.66 million (2006:RMB 11.71 million, 2005:RMB 21.37 million) due to reduction in
financial loans as a result of the Restructuring Exercise.
Annual Reports
- Annual Reports 2006- Annual Reports 2005
- Annual Reports 2004