Haier bounces into black with HK$262m profit
Haier Electronics Group, a leading manufacturer of washing machines and water heaters in the mainland, has rebounded to a net profit of HK$262.3 million for last year from a HK$363.7 million loss a year earlier after it sold its loss-making mobile handset unit.
Haier said turnover from continuing operations rose 24.6 per cent to HK$6.9 billion, helped by a 26 per cent gain in sales of washing machines to HK$5.6 billion.
Gross profit margin in the washing-machine business rose four percentage points to 25.9 per cent as the company sold more high-end, front-loading machines to offset raw materials costs. Operating profit from the sector rose almost 30 per cent to HK$221 million.
'With increasing urbanisation, rising income and improving living standards among mainland citizens, the company is seeing significant potential for our front-loading washing machines,' Haier said. 'The group will also expand its export markets.'
Haier said total production capacity for washing machines rose to about eight million units from seven million units in 2005 after it completed a new production line in Chongqing in the first quarter.
Sales of water heaters rose 18 per cent last year to HK$1.2 billion, with operating profit jumping 25 per cent to HK$35 million.
Haier said there was great market potential for solar water heaters because of their 'environmentally friendly, safety and energy efficient features'.
The company booked a HK$103 million gain from the sale of the mobile handset business last year to its parent for HK$420 million.
Haier bought the front-loading washing machine and water heater businesses from its parent for HK$900 million last year.
The company said it would continue to explore further asset injections of white goods to broaden its business scope.
