Crocodile Garments excels as Lai Sun parent dulls group performance
The Lai Sun Group of companies, controlled by the family of Lim Por-yen, yesterday posted mixed interim results.
Parent Lai Sun Garment (International) posted an 8.2 per cent decline in net profit to $172.05 million for the six months to January, dampened by sluggish performance of its garment manufacturing and export business.
Property arm Lai Sun Development saw net profit surge 13.4 per cent to $352.85 million for the same period, helped by improved property sales and a recovery in rentals.
Retail unit Crocodile Garments' earnings rose 95.6 per cent to $22.87 million for the six-month period to January.
Earnings per share were 3.7 cents. Directors declared an interim dividend of three cents.
Lai Sun Hotels International, a subsidiary of Lai Sun Development, reported net losses of $19.25 million for the five months to December 31.
The hotel unit posted a net loss of $7.93 million for the year to July 31, 1996.
It changed its financial year after the company changed its name from Glynhill International earlier this year.
Analysts said the rebound in earnings at Lai Sun Development, the group's main profit generator, was attributable to the recovery of the property sector.
Lai Sun Development said it had achieved a satisfactory performance in property sales and leasing businesses.
Turnover rose 34.3 per cent to $1.12 billion and operating profits increased 53.4 per cent to $420.73 million.
Basic earnings per share were 42.7 cents against 37.6 cents previously, while fully diluted earnings per share were 38.7 cents.
Directors declared an interim dividend of 12.5 cents.
Lai Sun Development said property income booked in the first half included its interests in Shining Court in Shun Ning Road, Kowloon, Cambridge Court, in Kowloon Tong, and Parc Versailles, in Tai Po.
Analysts said more property sales would be booked in the second half, following the sale of several projects in Hong Kong and China.
A planned $1 billion flotation in Hong Kong of its mainland property subsidiary, Lai Fung Co, could further improve the property company's earnings, analysts said.
At Lai Sun Garment, the company said core businesses were negatively affected by keen competition from low-cost manufacturers in Indonesia, Vietnam and China.
'Profit margins were under significant pressure during the period under review,' the company said yesterday.
The textile group's earnings per share were 67.2 cents, down from 73.2 cents. Directors declared an interim dividend of 20 cents, compared with 30 cents over the same period previously.
Turnover rose 15.1 per cent to $1.93 billion against $1.68 billion. Lai Sun Hotels said turnover was $60.42 million for the period.
Operating losses were $10.32 million.
Losses per share were 8.44 cents and no dividend was declared.
Earlier this month, Cosco (HK), the investment arm of China's largest shipping company, acquired 20 per cent of the company's shares for $610 million.
