subsidiaries, the "Group"; SGX-ST stock code: 5EN; SEHK stock code:
1021) today announced its financial results for the three months ended
March 31, 2011 ("1Q2011").
The presentation currency of the Group has been changed from Singapore
Dollar ("S$") to Chinese Yuan ("RMB") as the majority of the Group's
sales and earnings originate in RMB and the change of presentation
currency to RMB will more closely align the Group's external financial
reporting with the profile of the Group.
Profit attributable to equity holders rose 25.4% from RMB48.1 million
in the three months ended March 31, 2010 ("1Q2010") to RMB60.4 million
in 1Q2011. This was on the back of a 32.9% increase in revenue from
RMB223.0 million in 1Q2010 to RMB296.5 million in 1Q2011.
The Group's core business and key growth contributor, Aluminium Alloy
Division, saw its sales climb 33.9% to RMB288.7 million in 1Q2011,
accounting for approximately 97.4% of total revenue.
In terms of end usage within the Aluminium Alloy Division, the Rail
Transport Industry was the division's main revenue contributor,
accounting for 79.9% of its revenue in 1Q2011. The Power Industry and
Others segment made up 0.1% and 20.0% of the division's revenue
The Group's overall gross profit margin improved from 32.6% in 1Q2010
to 34.4% in 1Q2011. This was due to a higher gross profit margin at
the Aluminium Alloy Division, which increased from 33.2% in 1Q2010 to
35.0% in 1Q2011.
During the period under review, selling and distribution expenses
increased 28.6% to RMB7.7 million, attributed mainly to the Aluminium
Alloy Division's higher business volume which translated to higher
staff costs. Administrative expenses remained fairly stable at RMB16.5
The Group's finance cost surged 209.1% to RMB2.8 million in 1Q2011,
due to higher level of bank borrowings in 1Q2011 as compared to
1Q2010, and also an increase in interest rates.
The Group's associated company Nanjing SR Puzhen Rail Transport Co.,
Ltd ("NPRT") contributed approximately RMB4.1 million in 1Q2011,
compared to RMB8.0 million in 1Q2010. This was attributed to a
decrease in delivery of train cars to its customers during the period
According to its 12th Five-Year Plan, the PRC government is committed
to the continuity and safety of railway development in the country,
and will continue to step up on the expansion and improvement of its
railway network nationwide. The Ministry of Railways has set aside
RMB745.5 billion for railway investment in 2011. In particular,
high-speed railway remains the main focus of the PRC's strategies on
national railway development, with a total of 45,000 kilometres and
spending of RMB2.8 trillion expected at the end of the 12 th Five-Year
Plan. At the same time, more second-tier cities and provincial
capitals are expected to initiate the construction of urban light rail
and metro lines.
To tap these growth opportunities, Midas recently announced plans to
establish a new plant in Luoyang City, Henan Province. This will
enable the Group to be in closer proximity to its customers located in
central and southern China. Its strategy has already won the
endorsement of Luoyang CSR Mass Transit Vehicle Co., Ltd ("Luoyang
CSR"), which entered into a master supply agreement with the Group.
Mr. Patrick Chew, CEO of Midas, said, "With our established track
record and quality products and services, we are well-placed to
leverage on the potential market opportunities in the PRC.
"Following the completion of our new production plant, we will also
have the capacity to pursue growth opportunities in the international
rail transportation market. We are optimistic that our proven track
record with global rail transport players will enhance our presence in
the international markets."
Construction of the new plant is expected to be completed in the
second half of 2012. The Group's total annual extrusion production
capacity is set to increase to 70,000 tonnes, while its annual
downstream fabrication capacity to process train car body components
will also increase to 1,300 train cars.
Barring unforeseen circumstances, the Group is optimistic that it will
continue to achieve good performance in 2011.