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Samson Paper Announces 2018 Interim Results, Turnover Up 6.1% to HK$3,110,500,000

  • Written by ACN Newswire
Samson Paper Announces 2018 Interim Results, Turnover Up 6.1% to HK$3,110,500,000
HONG KONG, Nov 28, 2018 - (ACN Newswire) - Samson Paper Holdings Limited ("Samson Paper" and together with its subsidiaries, the "Group") (stock code: 0731), the main paper merchant in Hong Kong, announced its unaudited interim results for the six months ended 30 September 2018 ("1H 2018" or the "Period").

Amid the uncertain business operating environment, the Group has continued to execute the strategies of keeping lower stocks, carrying out more indent sales while closely monitoring customers operations and implementing controls intended to mitigate credit risks, in order to pursue profitability rather than volume and market share.The Group recorded a 6.1% growth in overall turnover to HK$3,110,500,000 in 1H 2018. Gross profit increased from the same period last year by 8.5% to HK$310,779,000 with an increase in gross profit margin from 9.8% to 10.0%. Profit attributable to the owners of the Company rose by 39.9% from HK$33,714,000 to HK$47,151,000. Basic earnings per share were HK4.1 cents. The Board of Directors proposed an interim dividend of HK0.4 cent per share.

Business ReviewAs for the paper trading business, the turnover slightly decreased by 0.3% to HK$2,262,654,000 with a decrease of 13.3% in sales tonnage resulting from the strategies of destocking and emphasis on the pursuit of profitability. In terms of market regions, turnover from the PRC market increased 5.3% to HK$1,695,102,000 with a 6.9% decrease in volume, while the Hong Kong market recorded a 18.0% decrease to HK$350,922,000. With great efforts and resources on expansion of the business in Malaysia region, sales in the region achieved a two-fold increase to HK$64,400,000 driven by winning significant tenders.

For paper manufacturing segment, the selling price of packaging boards maintained at high level with the high raw material costs. The Group achieved a strong turnover growth of 30.8% in the paper manufacturing business, including inter-segment revenue to HK$785,220,000, with sales tonnage increased 3.6%. The operating profit increased 25.7% to HK$54,743,000 with its operating profit margin at 7.1%.

As for the property developement business of the Group, first stage of phase one construction of the Nantong Business Park project with total gross floor area ('GFA') of 16,306 m2 for the first stage of phase one was completed and the acceptance and examination on completion of construction properties was obtained. As at 30 September 2018, deposits of RMB11,015,000 has been received from two potential purchasers with an estimated sales value of RMB21,861,000 on the first stage of phase one site covering a total GFA of 5,286 m2. Application for a construction work planning permit on seven blocks of properties with total GFA of 18,730 m2 on the site for the second stage of phase one is also in progress. Deposits totaling RMB4,065,000 have been received from one potential purchaser for one of the blocks with an estimated sales value of RMB13,550,000 in total covering a total gross floor area of 3,265 m2. On the other hand, the construction of the Xiamen project was completed and the acceptance and examination on completion of construction properties was obtained. Negotiation on leasing of certain portion of the properties with potential tenants was in progress.

For property investment business, during the period under review, rental income from investment properties with a value of HK$694,000,000 as at 30 September 2018 has increased 13.0% to HK$11,502,000 compared with the same period last year. The gross rental revenue of the property segment was HK$30,455,000 for the six months ended 30 September 2018.

In other businesses segment, the aeronautic parts and services business and marine services business recorded a turnover of HK$5,322,000 and HK$18,627,000 respectively. In consumable product business, apart from franchisees, the Group is also striving to expand its wholesale direct consumer base. Owing to the improved performance in wholesale growth and product diversification, revenue of this segment surged 34.2% from HK$27,461,000 to HK$36,853,000.

ProspectsLooking ahead, the Group will continue its sales strategies with an intention of keeping reduced stock and securing more indent orders to mitigate the volatility of paper prices. In the manufacturing segment, the Group will also upgrade its production facilities and power plant in order to realise cost savings, and to streamline and centralise internal processes for greater efficiency, ultimately strengthening its business overall. In market expansion, the Group has invested in expanding into Malaysia in the past few year and the efforts have begun to bear fruit with trading turnover in that region increasing. The Group is assessing the possibility to set up a sales office in Southeast Asia to achieve better cost control and further market diversification.

In the property development and investment segment, the application of the second stage of phase 1 construction of Nantong Business Park will be submitted to the responsible planning authority in the second half of the financial year. The Group is seeking potential buyers for customized construction once the application is approved. As for the Xiamen project, subject to manangement decision, the certain properties may be leased to third parties starting in December 2018, bringing a stable revenue and cash inflow to the Group

As for the consumable product business segment, the Group wishes to introduce a wider variety of food, such as foreign fruit, in order to meet the market demand, as well as to improve the operating performance of this segment.

Mr. LEE Seng Jin, Deputy Chairman and Chief Executive Officer of Samson Paper said, "Although the overall market is still challenging, the Group's persistent efforts and investment in diversifying its businesses in the past years have enabled it to successfully navigate the market uncertainty as well as prepare to capture opportunities in the future. In the face of these challenging conditions, continued business diversification would have a positive impact on the Group's overall profitability and sustainability. The Group is cautiously optimistic about its prospects and will continue to carefully monitor the overall situation and proactively adjust its strategy. We are striving to sustain our long-term growth and deliver favorable returns to our shareholders."

About Samson Paper Holdings Limited (Stock code: 0731)Samson Paper is the largest paper merchant in Hong Kong. It has over 20 sales offices in major coastal industrial and inland cities in the PRC, and branches in Singapore, Korea and Malaysia, helping it distribute products of over 100 global paper brands. Building on its solid foundation, the Group has been evolving, turning itself from a paper trader into an integrated distribution services provider with capability in diverse business pursuits including trading, logistics solution, properties, wholesale and franchise distribution.

Media EnquiriesStrategic Financial Relations LimitedMandy GO +852 2864 4812 [email protected]Ka Wai LI +852 2864 4855 [email protected]Vivian LEE +852 2114 4950 [email protected]Website:[1][2][3][4]

Topic: Press release summarySectors: Daily Finance, Daily News[5][6] From the Asia Corporate News Network

Copyright © 2018 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.


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Authors: ACN Newswire

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