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Midas posts 76.3% jump in FY16 profit on acquisition's contribution
MIDAS Holdings on Tuesday reported a 76.3 per cent year-on-year rise in profit after tax for the full year to 100.8 million yuan (S$20.5 million), lifted by contributions from the aluminium stretched plates division following its acquisition on July 27 last year.
The growth in profit after tax was also supported by a rise in other income, which went up 72.2 per cent to 40.9 million yuan, mainly due to government subsidies received. Other income comprised of mainly interest income and disposal of scrap materials from the group's aluminium alloy extruded products division.
The higher earnings came even as revenue in FY16 dipped 1.8 per cent to 1.49 billion yuan, weighed down by the group's core aluminium alloy extruded products division, which makes up 87 per cent of FY16 revenue.
Gross profit margin rose from 26.9 per cent in FY15 to 29.7 per cent in FY16, due to a higher gross profit margin of 30 per cent achieved at the group's aluminium alloy extruded products division, compared to 27 per cent in FY15.
In its outlook, the company said that China's railway expansion plans, together with its "One Belt One Road" initiative, "represent significant infrastructure and construction opportunities".
"Besides capitalising on opportunities in the railway industry, the group remains on track with its strategy to expand its customer base to enter new industries and sectors. With the acquisition of Huicheng Capital on July 27, 2016, the group has expanded its range of products and services to include aluminium alloy stretched plates and hot-rolled aluminium alloy plates and coils. The group aims to further expand its operational capabilities in a similar direction for the coming years."