21 September 2007 - Global Sweeteners Holdings Limited (“Global Sweeteners” or the “Company”, stock code: 3889), together with its subsidiaries and jointly-controlled entities the “Group”), one of the largest corn sweetener producers in the People's Republic of China (“PRC”), announced today its first interim results after its listing on The Stock Exchange of Hong Kong Limited.
For the six months ended 30 June 2007, the unaudited consolidated turnover and profit attributable to equity holders amounted to HK$727.5million and HK$99.6 million respectively, representing increases of 42.7 per cent and 36.4 per cent when compared with those of the same period last year, respectively. Basic earnings per share for the period were HK14.2 cents.
The encouraging results of the Group were mainly attributable to the growth in the overall sales volume and average unit selling price of most of the Group’s product. Gross profit of the Group increased by 32.7 per cent to approximately HK$145.7 million.
The board of directors of Global Sweeteners has resolved not to recommend the payment of an interim dividend for the six months ended 30 June 2007 (2006 same period: nil).
“The Group’s profit attributable to equity holders in the first quarter of 2007 amounted to HK$34.6 million, such figure rose further to HK$99.6 million for the first half, reflecting a significant increase in net profit during the second quarter. The increase was mainly driven by the increase in average unit selling price of corn sweeteners and the Group’s effective control over operating expenses. In addition, the Group’s product sales were further lifted by the arrival of the industrial peak season,” said Mr. Kong Zhanpeng, Chairman of Global Sweeteners.
As the China’s leading corn sweetener producers, the Group has three main product categories: corn syrup (glucose syrup, maltose syrup & high fructose corn syrup (HFCS), corn syrup solid (crystallised glucose and maltodextrin) and sugar alcohol (sorbitol).
During the period, the price of corn starch rose substantially due to increase in corn kernel prices. The Group managed to pass on the increased material costs to its customers, and thus pushed up the revenue of glucose syrup, maltose syrup and HFCS. This resulted in a 28.6 per cent upsurge in the revenue of the corn syrup category and amounted to HK$603.6 million. Gross profit of corn syrup products was HK$127.9 million during the period.
With the increase in selling price of maltodextrin and the launching of the new product crystallised glucose, the revenue of corn syrup solid increased substantially by approximately 271.0 per cent during the period to HK$121.5 million and the gross profit grew substantially by 340.2 per cent to HK$18.1 million, which was in line with the enlarged sales volume.
During the period under review, the revenue and gross profit of sugar alcohol decreased to approximately HK$2.2 million and HK$0.1 million respectively. Price of sorbitol began to drop since the second half of 2006, as a result of intense competition in the PRC market. The gross profit margin decreased to 2.9 per cent owing to the decrease in production utilisation.
“We will continue to expand our sales network to enlarge our market coverage, the Group plans to establish sales offices in certain provinces of the PRC in order to achieve higher efficiency, provide better service to the customers and obtain more information of the local market to assist the management to respond to the changes in market conditions. At present, we intend to establish sales offices at Guangdong, Shanghai and Dalian during the year in order to broaden the customer base of the Group,” added Mr Kong.
The Group plans to established new production facilities at existing locations of the production facilities of the Group and other locations in the PRC to increase its production capacity. In addition to its organic growth, the Group is also actively exploring opportunities for accelerating its business development through merger and acquisition.
At present, the aggregate designed annual production capacity of the Group is 960,000 metric tonnes, including 580,000 metric tonnes for glucose and maltose syrup, 100,000 metric tonnes for HFCS, 200,000 metric tonnes for crystallised glucose, 20,000 metric tonnes for maltodextrin and 60,000 metric tonnes for sorbitol. The Group plans to expand its overall production capacity to 1.46 million metric tonnes in 2008 and to 2.16 million metric tonnes in 2009.
“We aim to strengthen the Group’s leading position in the corn sweetener market in Asia and to become a major player in the global market. We will strive to enlarge our market share and diversify our product mix, as well as enhance our capability in developing high value-added products through research and development and through strategic business alliances with prominent international market leaders,” said Mr Kong.