Exceptional gain lifts Hung Hing profit
Hung Hing Printing Group posted a 32 per cent rise in net profit for the six months ended September due to an exceptional gain from the change in fair value of the derivative component of convertible bonds.
The Hong Kong-listed firm's net profit rose to HK$226.65 million during the period from HK$171.72 million a year ago, while turnover fell 2 per cent to HK$1.71 billion.
Excluding the one-time gain, net profit of the company, which prints and manufactures paper and cartons as well as trades paper, rose 5 per cent.
Hung Hing chairman Yam Cheong-hung said operating profit declined 2 per cent in tandem with the 2 per cent revenue drop.
The fall in revenue was mainly due to slowing orders in the first quarter ended June, Mr Yam said.
'The first quarter saw global adjustments in oil prices, which impacted customer confidence. This resulted in a short-term slowdown in orders,' he said. 'Customer confidence improved during the following quarters.'
The revenue drop in the company's first half came mainly from its biggest business, paper and carton box printing and manufacturing, where sales dropped 4.7 per cent to HK$911.5 million.
In the past few months, orders on hand have increased slightly year on year, managing director Matthew Yum Chak-ming said.
During the six months ended September, Hung Hing recognised a change in the fair value of the derivative component of HK$750 million of convertible bonds it issued early this year, which resulted in an exceptional gain of HK$64 million.
Hung Hing's interest costs doubled in its first half to HK$31.2 million from the same period last year. The board declared an interim dividend of 9.5 cents per share, unchanged from last year.
The stock closed 4 per cent higher at HK$4.45.
