Kingboard Chemical reports 51pc increase in net earnings

PUBLISHED : Tuesday, 08 March, 2011, 12:00am
UPDATED : Tuesday, 08 March, 2011, 12:00am

Kingboard Chemical Holdings yesterday announced a 51 per cent rise in net profit to HK$3.62 billion, or HK4.278 per share, for 2010.

Overall revenue rose 42 per cent to HK$33.9 billion. The company proposed a final dividend of 60 HK cents per share.

Paul Cheung Kwok-wing, chairman of the group, said the strong overall results came from all business segments, including laminates, printed circuit boards (PCB), chemicals and property.

Strong demand for consumer electronics, especially smartphones and tablet PCs, fuelled growth in the laminate and PCB divisions. Turnover for the laminate division rose 43 per cent to HK$13.51 billion, with earnings before interest, tax, depreciation and amortisation (Ebitda) up 24 per cent at HK$3.39 billion.

The PCB division recorded a 20 per cent increase in turnover to HK$8.7 billion, while Ebitda increased 39 per cent to HK$1.62 billion. The chemical division saw a 52 per cent increase in turnover to HK$14.47 billion, with a doubled Ebitda of almost HK$ 2 billion.

Property development contributed HK$97 million of Ebitda to the group, up 29 per cent from 2009. It makes up 2.2 per cent of the group's total Ebitda. Total rental income for the group reached HK$125.7 million in 2010, up 38 per cent from HK$90.8 million in 2009.

It has a land bank of 2.6 million square metres, with investment properties and residential projects in eastern and southern provinces.

More than 90 per cent of units have been pre-sold at the group's first residential project, Shanghai Yu Garden in Jiangsu province, bringing in more than 900 million yuan (HK$1.07 billion) ahead of its completion in the second half of this year.

The group expected another commercial-residential project in the same province, the Qiandeng Kingboard Yu Garden, to generate HK$3 billion from pre-sales in 2011.

Its Kingboard Laminates Holdings subsidiary recorded HK$13.06 billion of revenue, up 44 per cent on 2009. Net profit went up 38 per cent to HK$2.28 billion.

However, the group recorded lower gross profit margin last year at 24 per cent, down from 28 per cent in 2009, mainly due to higher raw materials costs and the delayed opening of production plants in Jiangyin, Jiangsu and Fogang, Guangdong.

But the group expected the gross profit margin to recover as consumers were willing to pay higher prices for the products, which should allow the group to pass on the costs.