Hua Yi Copper Holdings, a copper rods and wires maker which has changed its reporting year, said its 12-month profit surged after gains from derivatives trading amid rising prices for its key raw material.
The company said net profit rose to HK$90.3 million for the year to June as the company realised HK$70 million from copper and foreign exchange forwards contracts. Turnover was HK$1.51 billion and operating profit totalled HK$137.9 million.
No comparable figures were given. For the 18 months to June last year, Hua Yi had net profit of HK$20.4 million on turnover of HK$1.45 billion.
The gain from derivatives trading, which was solely for hedging and risk management purposes, was mainly due to soaring copper prices, finance director Ronald Lau Man-tak said. The price of copper rose about 130 per cent in the London market in the year to June.
Mr Lau declined to forecast whether a similar gain would be booked for this financial year, saying it was difficult to speculate on the trend of copper prices.
Chairman Chau Lai-him said growth will be driven by expansion in production capacity, which will be more than doubled to 164,000 tonnes of copper products per year after new factories start operation this year and next, compared with 66,000 tonnes now.