26th Aug 2009 14:00
26 August 2009
CATHAY INTERNATIONAL HOLDINGS LIMITED
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009
CHAIRMAN'S INTERIM STATEMENT
|
Pharmaceutical |
||||||
|
Production |
||||||
|
Hotel |
Research & |
marketing & |
Health |
Corporate |
||
|
Operations |
development |
distribution |
Care |
Office |
Total |
|
|
(Stated in USD'000) |
||||||
|
For the six months ended 30 June 2009 |
||||||
|
Revenue |
4,329 |
- |
20,872 |
8,638 |
- |
33,839 |
|
Segment gross profit |
219 |
- |
14,184 |
1,454 |
- |
15,857 |
|
Segment operating profit/(loss) |
214 |
(350) |
4,260 |
208 |
(1,686) |
2,646 |
|
Segment finance costs |
(772) |
(25) |
(194) |
(245) |
(858) |
(2,094) |
|
Segment profit/(loss) before income tax |
(558) |
(375) |
4,066 |
(37) |
(2,544) |
552 |
|
Segment income tax expense |
- |
- |
(551) |
(27) |
(145) |
(723) |
|
Segment profit/(loss) for the period |
(558) |
(375) |
3,515 |
(64) |
(2,689) |
(171) |
|
For the six months ended 30 June 2008 |
(Restated) |
(Restated) |
||||
|
Revenue |
4,520 |
- |
16,670 |
7,746 |
- |
28,936 |
|
Segment gross profit |
575 |
- |
11,747 |
640 |
- |
12,962 |
|
Segment operating profit/(loss) |
719 |
(519) |
2,847 |
(351) |
(1,077) |
1,619 |
|
Segment finance costs |
(1,152) |
- |
(765) |
(296) |
(1,403) |
(3,616) |
|
Segment profit/(loss) before income tax |
(433) |
(519) |
2,083 |
(648) |
(2,480) |
(1,997) |
|
Segment income tax expense |
- |
- |
(383) |
(2) |
- |
(385) |
|
Segment profit/(loss) for the period |
(433) |
(519) |
1,700 |
(650) |
(2,480) |
(2,382) |
|
For the year ended 31 December 2008 |
||||||
|
Revenue |
9,090 |
- |
37,022 |
18,941 |
- |
65,053 |
|
Segment gross profit/(loss) |
184 |
- |
26,024 |
2,409 |
- |
28,617 |
|
Segment operating profit/(loss) |
1,002 |
(1,231) |
7,290 |
390 |
(2,595) |
4,856 |
|
Segment finance costs |
(2,383) |
- |
(1,362) |
(408) |
(2,766) |
(6,919) |
|
Segment loss before income tax |
(1,381) |
(1,231) |
5,928 |
(18) |
(5,361) |
(2,063) |
|
Segment income tax expense |
- |
- |
(756) |
(33) |
(122) |
(911) |
|
Segment profit/(loss) for the period |
(1,381) |
(1,231) |
5,172 |
(51) |
(5,483) |
(2,974) |
|
Note 1:
|
Previously, when the Lansen Pharmaceutical Holdings Limited Group and the Xian Haotian Bio-Engineering Technology Co. Ltd. Group were both in the developmental stage, and their operation results were not significant, it was more meaningful to aggregate their results together. However, since they have now evolved into sizable independent businesses, we decided to show their operation results separately in different columns (pharmaceutical and health care respectively) to give due recognition to their individual contributions to the Company.
|
|
Note 2:
|
Because of differences in accounting treatment between the health care operation’s half year and full year accounts for 2008, the health care operation’s numbers have been restated as explained below in the section headed "Health Care Business". The restatement, however, is solely for comparison purposes, and does not affect health care operation’s 2008 accounts
|
The Group recorded an operating profit of USD2,646,000 [2008: profit of USD1,619,000 (restated)]. The pharmaceutical production, marketing and distribution businesses continued to grow rapidly and achieved an operating profit of USD4,260,000 [(2008: USD2,847,000)]. The health care business achieved an operating profit of USD208,000 [2008: loss of USD351,000 (restated)]. Corporate office expenses and salaries have been quite stable compared to the same period last year.
The Group's profit before income tax for the six month period was USD552,000 [2008: loss of USD1,997,000 (restated)]. The shift to profit was mainly due to increased contributions from the pharmaceutical businesses and a reduction in finance costs.
The finance costs for the six month period were USD2,094,000 [2008: USD3,616,000 (restated)]. The decrease was due to lower interest rates on bank facilities.
The Group's loss before minority interests for the six month period was USD171,000 [2008: loss of USD2,382,000 (restated)].
PHARMACEUTICAL BUSINESS
Lansen Pharmaceutical Holdings Limited and its subsidiaries (the "Lansen Group")
The Lansen Group is engaged in the production, marketing and distribution of prescription drugs, primarily in the treatment of rheumatic disease.
The Lansen Group continues to be a major contributor to the Group's pharmaceutical business. This business grew by 25% when compared to the same period in 2008 (2008 over 2007: 66%).
The gross profit margin of the Lansen Group's pharmaceutical business was 68% (2008: 70%).
HEALTH CARE BUSINESS
Xian Haotian Bio-Engineering Technology Co. Ltd. and its group companies (the "Xian Haotian Group")
Going forward, the Xian Haotian Group's principal business will be in the manufacture, marketing and sales of inositol, key ingredient for health care products, the facilities required for which are under construction. To date, its business has been focussed on the manufacture, marketing and sale of plant extracts used as various active ingredients in food, beverage, cosmetics, dietary supplements and health care products.
A restatement of comparative figures of health care businesses for the six month period ended 30 June 2008 has been included for comparison purposes only. The inositol project of the Xian Haotian Group was going through a construction period in 2008 and the construction and related costs for the entire year ended 31 December 2008 were capitalised at year end. However, the portion of such costs relating to the six months ended 30 June 2008, (USD233,000) which should have been capitalised during such period was not capitalised until the year end. Accordingly, the comparative figures for the six months ended 30 June 2008 have now been restated and the costs so capitalised shows a decrease in loss of USD233,000 for such period. Such restatement is made for comparison purposes only and does not affect the results for the year ended 31 December 2008.
During the first six months of 2009 the Xian Haotian Group continued its investment, primarily in the construction of the inositol project. The inositol project is now in the final stage of construction.
Apart from the inositol project, the Xian Haotian Group's existing business grew by 12% when compared to the same period in 2008.
The Company and the shareholders of the Xian Haotian Group have in principle agreed to extend the expiry date for the put and call option arrangements. The actual date is expected to be determined after the completion of the first phase of the construction and with reference to the progress in the trial production and fine tuning of production process.
CROWNE PLAZA HOTEL & SUITES LANDMARK SHENZHEN
The Shenzhen hotel industry remains highly competitive. In addition, the hotel industry in China was adversely affected by the international economic downturn and the H1N1 disease. The number of foreign visitors and business travellers has reduced. This in turn led to lower than expected occupancy levels at our hotel.
The hotel achieved an average occupancy rate of 49% (2008: 43%) and an average room rate of USD109 (2008: USD130) for the first six months of 2009. The hotel's profit from operations for the first six months of 2009 was USD214,000 (2008: USD719,000). The decrease was mainly due to a decrease in profit margin on rooms by 4%.
In accordance with our usual practice, the Group will conduct an annual valuation of the hotel at the year end.
CORPORATE EXPENSES
The Group's corporate expenses increased to USD1,686,000 (2008: USD1,077,000). This was mainly due to a lesser foreign exchange gain of USD22,000 (2008: USD699,000). Apart from this, the Group's corporate expenses were reduced by USD68,000.
Conclusion
The Board believes that it is well positioned for continued expansion in the pharmaceutical and health care industries in China. As to the hotel business, the Board believes that as the world economy and business travel start to recover, it should show improved results.
On behalf of the Board, I would like to thank our management and staff for their continued dedication and commitment.
Sum Soon Lim
Chairman
Enquiries:
|
Stephen Hunt (Deputy Chairman) |
(via Brunswick) |
020 7404 5959 |
|
Patrick Sung (Director - Finance) |
Group Condensed Statement of Comprehensive Income
|
Six months |
Six months |
Year ended |
||
|
ended 30 June |
ended 30 June |
31 December |
||
|
2009 |
2008 |
2008 |
||
|
(Unaudited) |
(Unaudited and restated) |
(Audited) |
||
|
Note |
USD'000 |
USD'000 |
USD'000 |
|
|
Revenue |
3 |
33,839 |
28,936 |
65,053 |
|
Cost of sales |
(17,982) |
(15,974) |
(36,436) |
|
|
Gross profit |
15,857 |
12,962 |
28,617 |
|
|
Other income |
521 |
989 |
2,287 |
|
|
Selling and distribution expenses |
(8,104) |
(6,812) |
(15,353) |
|
|
Administrative expenses |
(5,628) |
(5,520) |
(10,695) |
|
|
Profit from operations |
2,646 |
1,619 |
4,856 |
|
|
Finance costs |
(2,094) |
(3,616) |
(6,919) |
|
|
Profit/(loss) before income tax |
3 |
552 |
(1,997) |
(2,063) |
|
Income tax expense |
4 |
(723) |
(385) |
(911) |
|
Loss for the period |
(171) |
(2,382) |
(2,974) |
|
|
Other comprehensive (loss)/income |
||||
|
Exchange differences on translating foreign operations |
(700) |
587 |
1,620 |
|
|
Deficit on revaluation of hotel properties |
- |
- |
(3,471) |
|
|
Other comprehensive (loss)/income, net of tax |
(700) |
587 |
(1,851) |
|
|
Total comprehensive (loss)/income for the period |
(871) |
(1,795) |
(4,825) |
|
|
Loss for the period attributable to: |
||||
|
Owners of the parent |
(415) |
(2,229) |
(3,369) |
|
|
Minority interests |
244 |
(153) |
395 |
|
|
(171) |
(2,382) |
(2,974) |
||
|
Total comprehensive income attributable to: |
||||
|
Owners of the parent |
(1,115) |
(1,578) |
(5,136) |
|
|
Minority interests |
244 |
(217) |
311 |
|
|
(871) |
(1,795) |
(4,825) |
||
|
Loss per share attributable to owners of the parent |
5 |
|||
|
Basic |
(0.15) cents |
(0.81) cents |
(1.22) cents |
|
|
Diluted |
N/A |
N/A |
N/A |
All operations arise from continuing activities.
Group Condensed Statement of Financial Position
|
As at |
As at |
As at |
|||||
|
30 June |
30 June |
31 December |
|||||
|
2009 |
2008 |
2008 |
|||||
|
(Unaudited) |
(Unaudited and restated) |
(Audited) |
|||||
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
||
|
ASSETS |
|||||||
|
NON-CURRENT ASSETS |
|||||||
|
Property, plant and equipment |
158,362 |
153,536 |
156,137 |
||||
|
Land use rights |
3,053 |
3,099 |
3,090 |
||||
|
Investment property |
1,559 |
1,553 |
1,560 |
||||
|
Intangible assets |
3,051 |
1,386 |
2,550 |
||||
|
Goodwill |
10,065 |
9,156 |
10,012 |
||||
|
Loans to minority shareholders |
15 |
645 |
380 |
||||
|
176,105 |
|
169,375 |
|
173,729 |
|||
|
CURRENT ASSETS |
|||||||
|
Inventories |
12,644 |
8,336 |
8,997 |
||||
|
Trade and other receivables |
38,798 |
18,996 |
35,600 |
||||
|
Investments |
385 |
- |
385 |
||||
|
Land use rights |
68 |
67 |
68 |
||||
|
Pledged bank deposits |
152 |
6,556 |
878 |
||||
|
Cash and cash equivalents |
8,831 |
|
11,483 |
|
15,763 |
||
|
60,878 |
|
45,438 |
|
61,691 |
|||
|
TOTAL ASSETS |
|
236,983 |
|
214,813 |
|
235,420 |
|
|
EQUITY AND LIABILITIES |
|||||||
|
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT |
60,629 |
64,484 |
61,578 |
||||
|
MINORITY INTERESTS |
10,322 |
9,547 |
10,630 |
||||
|
TOTAL EQUITY |
70,951 |
74,031 |
72,208 |
||||
|
NON-CURRENT LIABILTIES |
|||||||
|
Borrowings |
67,122 |
50,536 |
69,030 |
||||
|
Deferred tax liabilities |
20,544 |
16,992 |
20,399 |
||||
|
87,666 |
|
67,528 |
|
89,429 |
|||
|
CURRENT LIABILITIES |
|||||||
|
Borrowings |
31,629 |
29,998 |
31,667 |
||||
|
Current tax liabilities |
729 |
608 |
528 |
||||
|
Trade and other payables |
46,008 |
42,648 |
41,588 |
||||
|
78,366 |
|
73,254 |
|
73,783 |
|||
|
TOTAL LIABILITIES |
166,032 |
140,782 |
163,212 |
||||
|
TOTAL EQUITY AND LIABILITIES |
|
236,983 |
|
214,813 |
|
235,420 |
Group Condensed Statement of Changes in Equity
|
Attributable to owners of the parent |
Minority Interests |
Total Equity |
||||||||
|
Share Capital |
Share Premium |
Capital and Special Reserve |
Revaluation Reserve |
Exchange Equalisatoin Reserve |
Statutory Reserve |
Profit And Loss Account |
Total |
|||
|
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
|
|
Balance at 1 January 2009 |
13,793 |
10,216 |
97,502 |
11,056 |
(25,047) |
1,883 |
(47,825) |
61,578 |
10,630 |
72,208 |
|
Acquisition of minority interests |
- |
- |
- |
- |
- |
- |
- |
- |
(34) |
(34) |
|
Dividend payable to minority shareholders |
- |
- |
- |
- |
- |
- |
- |
- |
(327) |
(327) |
|
Capital injection from minority shareholders |
- |
- |
- |
- |
- |
- |
- |
- |
11 |
11 |
|
Redeem shares from minority interests |
- |
- |
166 |
- |
- |
- |
- |
166 |
(202) |
(36) |
|
Transactions with owners |
- |
- |
166 |
- |
- |
- |
- |
166 |
(552) |
(386) |
|
(Loss)/profit for the period |
- |
- |
- |
- |
- |
- |
(415) |
(415) |
244 |
(171) |
|
Other comprehensive income: |
||||||||||
|
Exchange differences arising on translation of foreign currency operations |
- |
- |
- |
(24) |
(676) |
- |
- |
(700) |
- |
(700) |
|
Total comprehensive income for the period |
- |
- |
- |
(24) |
(676) |
- |
(415) |
(1,115) |
244 |
(871) |
|
Balance at 30 June 2009 |
13,793 |
10,216 |
97,668 |
11,032 |
(25,723) |
1,883 |
(48,240) |
60,629 |
10,322 |
70,951 |
|
Balance at 1 January 2008 |
13,793 |
10,216 |
42,923 |
63,429 |
(21,692) |
1,849 |
(44,456) |
66,062 |
9,784 |
75,846 |
|
Acquisition of a subsidiary |
- |
- |
- |
- |
- |
- |
- |
- |
104 |
104 |
|
Adjustments on goodwill |
- |
- |
- |
- |
- |
- |
- |
- |
(124) |
(124) |
|
Transactions with owners |
- |
- |
- |
- |
- |
- |
- |
- |
(20) |
(20) |
|
Loss for the period |
- |
- |
- |
- |
- |
- |
(2,229) |
(2,229) |
(153) |
(2,382) |
|
Other comprehensive income: |
||||||||||
|
Exchange differences arising on translation of foreign currency operations |
- |
- |
- |
4,689 |
(4,149) |
111 |
- |
651 |
(64) |
587 |
|
Total comprehensive income for the period |
- |
- |
- |
4,689 |
(4,149) |
111 |
(2,229) |
(1,578) |
(217) |
(1,795) |
|
Balance at 30 June 2008 (restated) |
13,793 |
10,216 |
42,923 |
68,118 |
(25,841) |
1,960 |
(46,685) |
64,484 |
9,547 |
74,031 |
|
Balance at 1 January 2008 |
13,793 |
10,216 |
42,923 |
63,429 |
(21,692) |
1,849 |
(44,456) |
66,062 |
9,784 |
75,846 |
|
Adjustments on goodwill |
- |
- |
- |
- |
- |
- |
- |
- |
(219) |
(219) |
|
Acquisition of subsidiaries |
- |
- |
- |
- |
- |
- |
- |
- |
965 |
965 |
|
Capital injection from minority interests |
- |
- |
652 |
- |
- |
- |
- |
652 |
206 |
858 |
|
Dividend payable to minority shareholders |
- |
- |
- |
- |
- |
- |
- |
- |
(270) |
(270) |
|
Redeem shares from minority interests |
- |
- |
- |
- |
- |
- |
- |
- |
(147) |
(147) |
|
Transfer of reserve |
- |
- |
53,927 |
(53,927) |
- |
- |
- |
- |
- |
- |
|
Transactions with owners |
- |
- |
54,579 |
(53,927) |
- |
- |
- |
652 |
535 |
1,187 |
|
(Loss)/profit for the year |
- |
- |
- |
- |
- |
- |
(3,369) |
(3,369) |
395 |
(2,974) |
|
Other comprehensive income: |
||||||||||
|
Exchange differences arising on translation of foreign currency operations |
- |
- |
- |
5,025 |
(3,355) |
34 |
- |
1,704 |
(84) |
1,620 |
|
Deficit on revaluation of hotel properties |
- |
- |
- |
(3,471) |
- |
- |
- |
(3,471) |
- |
(3,471) |
|
Total comprehensive income for the year |
- |
- |
- |
1,554 |
(3,355) |
34 |
(3,369) |
(5,136) |
311 |
(4,825) |
|
Balance at 31 December 2008 |
13,793 |
10,216 |
97,502 |
11,056 |
(25,047) |
1,883 |
(47,825) |
61,578 |
10,630 |
72,208 |
Group Condensed Statement of Cash Flows
|
Six months |
Six months |
Year ended |
||||
|
ended 30 June |
ended 30 June |
31 December |
||||
|
2009 |
2008 |
2008 |
||||
|
(Unaudited) |
(Unaudited and restated) |
(Audited) |
||||
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
|
Net cash (used in)/generated from operating activities |
(920) |
5,509 |
(11,850) |
|||
|
Net cash used in investing activities |
(3,361) |
(5,774) |
(3,956) |
|||
|
Net cash (used in)/generated from financing activities |
(1,918) |
(756) |
19,167 |
|||
|
Net (decrease)/increase in cash and cash equivalents |
(6,199) |
(1,021) |
3,361 |
|||
|
Effects of exchange rate changes |
(638) |
|
1,252 |
|
1,182 |
|
|
Cash and cash equivalents at beginning of the period |
15,668 |
|
11,125 |
|
11,125 |
|
|
Cash and cash equivalents at end of the period |
8,831 |
|
11,356 |
|
15,668 |
|
|
Analysis of cash and cash equivalents |
||||||
|
Cash and bank balances |
8,831 |
11,483 |
15,763 |
|||
|
Bank overdrafts |
- |
(127) |
(95) |
|||
|
8,831 |
|
11,356 |
|
15,668 |
NOTES TO THE ACCOUNTS
1. BASIS OF PREPARATION
The interim condensed financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting and under the historical cost convention, modified where appropriate to incorporate a professional valuation of certain fixed assets.
The accounting policies adopted are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2008 except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007) and IFRS 8 Operating Segments. Certain comparative figures for the period ended 30 June 2008 in condensed financial statements have been reclassified to conform to the current period's presentation.
The adoption of IAS 1 (Revised 2007) does not affect the financial position or profits of the Group, but gives rise to additional disclosures. The measurement and recognition of the Group's assets, liabilities, income and expenses are unchanged, however some items that were recognised directly in equity are now recognised in other comprehensive income, for example, revaluation of hotel properties. IAS 1 (Revised 2007) affects the presentation of owner changes in equity and introduces a "Statement of comprehensive income".
The adoption of IFRS 8 has changed the segments that are disclosed in the interim financial statements. In the previous annual and interim financial statements, segments were identified by reference to the dominant source and nature of the Group's risks and returns. Under IFRS 8 the accounting policy for identifying segments is now based on the internal management reporting information that is regularly reviewed by the chief operating decision maker.
The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidation interim financial statements.
2. RESTATEMENT OF PRIOR PERIOD INTERIM
A restatement of comparative figures of health care businesses for the six month period ended 30 June 2008 has been included for comparison purposes only. The inositol project of the Xian Haotian Group was going through a construction period in 2008 and the construction and related costs for the entire year ended 31 December 2008 were capitalised at year end. However, the portion of such costs relating to the six months ended 30 June 2008, (USD233,000) which should have been capitalised during such period was not capitalised until the year end. Accordingly, the comparative figures for the six months ended 30 June 2008 have now been restated and the costs so capitalised shows a decrease in loss of USD233,000 for such period. Such restatement is made for comparison purposes only and does not affect the results for the year ended 31 December 2008.
3. SEGMENTAL INFORMATION
|
Six months |
Six months |
Year ended |
|
|
ended 30 June |
ended 30 June |
31 December |
|
|
2009 |
2008 |
2008 |
|
|
(Unaudited) |
(Unaudited and restated) |
(Audited) |
|
|
|
USD'000 |
USD'000 |
USD'000 |
|
Revenue |
|||
|
Pharmaceutical: |
|||
|
Research & Development |
- |
- |
- |
|
Production, Marketing & Distribution |
20,872 |
16,670 |
37,022 |
|
Health Care Operations |
8,638 |
7,746 |
18,941 |
|
Hotel Operations |
4,329 |
4,520 |
9,090 |
|
33,839 |
28,936 |
65,053 |
|
|
Profit/(loss) before income tax |
|||
|
Pharmaceutical: |
|||
|
Research & Development |
(375) |
(519) |
(1,231) |
|
Production, Marketing & Distribution |
4,066 |
2,083 |
5,928 |
|
Health Care Operations |
(37) |
(648) |
(18) |
|
Hotel Operations |
(558) |
(433) |
(1,381) |
|
Corporate Office/Unallocatd |
(2,544) |
(2,480) |
(5,361) |
|
|
552 |
(1,997) |
(2,063) |
4. INCOME TAX EXPENSE
The provision for current tax has been made in respect of the assessable profits arising in the PRC during the period.
5. LOSS PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENT
Loss per share is based upon the loss after tax attributable to owners of USD415,000 for the six months ended 30 June 2009 [six months ended 30 June 2008: loss of USD2,229,000 (restated)] and the weighted average number of A shares and common shares in issue during the period of 11,726,915 and 264,133,189 respectively (30 June 2008: 11,800,049 and 264,060,055 respectively).
No diluted earnings per share is presented, as the Company did not have any potential ordinary shares outstanding.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Each of the directors confirms that, to the best of his knowledge:
i) the condensed set of financial statements, which has been prepared in accordance with the International Financial Reporting Standards and IAS 34 Interim Financial Reporting, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole;
ii) the interim management report includes a fair review of the information required by the Disclosure and Transparency Rules 4.2.7R, and;
iii) the interim management report includes a fair review of the information required by the Disclosure and Transparency Rules 4.2.8R.
PUBLICATION OF NON-STATUTORY ACCOUNTS
The unaudited interim results do not constitute full accounts prepared in accordance with the listing rules of the UK Financial Services Authority. The figures for the year ended 31 December 2008 have been based on the full accounts of the Company which were prepared under IFRS and which included an unqualified audit report. The interim financial information in this report has been neither audited nor reviewed by the Company's auditors.
Copies of this report have been sent to shareholders and are available to the public from the Company's UK Transfer Agents, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.
Related Shares:
CTI.L