Wo Kee Hong (Holdings) said its business for the first six months to June had returned to profitability after 18 months of losses. The diversified distributor of audio-visual equipment and software, air-conditioners, cars and car accessories recorded an unaudited profit attributable to shareholders of $10.19 million against a loss of $83.30 million for the last corresponding period. Earnings per shares were 0.9 cents versus a 7.3 cent loss in 1996. The improvement was mainly driven by an increase in profit margins which as a percentage of sales more than doubled compared with last year. Vice-chairman and chief executive officer Richard Lee Man-fai said: 'Substantial profit margin improvements were achieved in audio-visual products, air-conditioning products, car audio and electronic products. 'The reorganisation of our operation has now mostly been completed and has resulted in a substantial reduction in inventories, liabilities and operational expenses.' Profit before taxation was $12.23 million against a loss of $80.93 million but turnover fell to $1.21 billion from $1.6 billion. Despite the improvement, the company did not declare an interim dividend for shareholders. Mr Lee said the challenges for the second half of the year would be to sustain the recovery momentum and to continue the improvement of business with higher margin products and enhance operational efficiency further.