Allied profit plunges after restructuring
ALLIED Industries International reported a 77 per cent slump in net profit in 1993 of $22.9 million compared with $102.8 million for the same period in the previous year.
For the 12 months ending December 31, earnings per share were down to 2.9 cents from 12.8 cents in 1992. A final dividend of two cents per share was recommended, bring the total dividend for the year to 3.5 cents per share, the same as the previous year.
The company is a member of the Allied Group of Malaysian tycoon Lee Ming Tee and was the subject of a Government investigation last September for alleged breach of takeover codes.
Allied Industries chairman and chief executive Chung Tze Hien said following the disposal of subsidiaries, total turnover was down from $1.78 billion in 1992 to $370.2 million in 1993.
The group embarked on a programme of disposal of its interests in associated companies, including Santai Manufacturing, during the year to establish itself as a strong industrial stock.
''The key for 1993 was to transform the company into an effective operating company directly involved in high growth industrial activities, particularly in China,'' said Mr Chung.
With a solid foundation established, the group was well-positioned for strong growth in 1994 and beyond, he said.
Funds realised from company disposals had been successfully reinvested in the new industrial activities targeted by the company, and some of the activities had started generating results in the second half of the year.
Mr Chung expected the company's future earnings and recurrent income base would be further strengthened as its existing investments, and those investments to be made in the near future, began to reflect their full earnings potential.
Chairman and chief executive of Allied Group Brian O'Connor said projects taken up in 1993 showed that Allied Industries International was able to put the investigation behind it.
He said although Mr Lee had resigned from all Allied companies, he still had an important role to play as a consultant to the group, especially in the China market.
The group has established five key businesses: chemicals, building materials, transport, consumer goods and environmental protection services.
In August 1993, three joint ventures were established in co-operation with the Jilin Chemical Industrial Corp, one of the largest petrochemical companies in China.
Production at all three plants is expected to begin in the second quarter of this year.
Allied's building materials division has set up a cement factory in China - Shanghai Allied Cement Corp.
To tap the huge consumer market in China, the group has acquired majority equity interest in Dawlish Enterprises and Vincent Honour, which are both involved in the distribution of consumer goods and food manufacturing.