Full Year Results Financial Statement And Related Announcement

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Full Year Financial Statement And Dividend Announcement for the Year Ended 31 December 2011

Consolidated Statement Of Comprehensive Income For The Quarter Ended 31 December 2011 And 31 December 2010

Review Of Performance

INCOME STATEMENT
Comparing 4Q FY2011 vs 4Q FY2010

Revenue in 4Q FY2011 amounted to US$125.7 million compared to US$127.1 million in the same quarter last financial year. This is due to lower contributions from the South East Asian markets while sales from the North Asian markets remained strong. Gross profit margin improved from 6.9% (4Q FY2010) to 7.4% this quarter. Net profit after tax rose by 108.1%, from US$0.9 million in 4Q FY2010 to US$1.9 million in 4Q FY2011.

Operating expenses decreased from US$8.4 million in 4Q FY2010 to US$7.9 million this quarter. In 4Q FY2011, selling and distribution as well as general and administrative expenses rose by 13.2% and 1.1% respectively due to higher sales activities. Finance costs were lower by 14.5% due to reduced bank borrowings and better cash flow management.

Compared to 4Q FY2010, the value of quoted investments was lower by US$0.3 million this quarter. Comprehensive income totaled $1.6 million in 4Q FY2011 compared to US$1.0 million in the same quarter last year.

Comparing FY2011 vs FY2010

Compared to FY2010, the Group delivered significantly improved performance in FY2011 due to strong business sentiments in North Asian markets and better margins.

Revenue for the year amounted to US$489.4 million compared to US$496.4 million in the previous financial year. Gross profit margin rose from 7.0% to 7.8%. Reflecting the Group’s improved cost management, total operating expenses rose by a marginal 0.6% from US$32.5 million to US$32.7 million.

Net profit after tax rose from US$2.6 million to US$4.7 million, representing a year-on-year increase of 84.8%.

Affected by the US$1.3 million net loss on fair value changes of available-for-sale financial assets, total comprehensive income only rose by US$0.2 million from US$3.3 million to US$3.5 million.

BALANCE SHEET

Net assets rose from US$44.5 million as at 31 December 2010 to US$ 46.7million due to:

• Increase in trade debtors, which rose from US$57.7 million to US$66.5 million, due to higher sales this quarter. Trade creditors and accruals rose from US$57.8 million to US$63.2 million due to higher stock. Trade debtors’ turnover days rose marginally from 41 days as at 31 December 2010 to 46 days while trade creditors’ turnover days stood at 48 days compared to 42 days in 31 December 2010.
  
  
• Stocks balance rose from US$59.2 million as at 31 December 2010 to US$63.2 million. Stocks turnover period is lengthened to 49 days compared to 37 days in 31 December 2010.
  
  
• Reduction in interest-bearing bank loans and borrowings, which declined from US$30.8 million as at 31 December 2010 to US$29.7 million.
  
  
• Net increase in tax provision of US$0.3 million and US$0.8 million net increase in other creditors.
  
  
• Cash and short term deposits amounted to US$12.1 million compared to US$16.0 million as at 31 December 2010 due to the utilization of cash for working capital requirements.
  
  

SHAREHOLDERS’ EQUITY

Shareholders’ equity rose from US$44.5 million as at 31 December 2010 to US$46.7 million due to a US$2.2 million increase in reserves.

WORKING CAPITAL

Despite the higher activities during the quarter, operating activities used approximately US$0.1 million. This is due mainly to the profit contribution of US$2.2 million, a US$0.3 million decrease in stocks, increase in trade debtors, other debtors and prepayments of US$4.9 million and an increase in trade creditors, accruals and other creditors of US$3.1 million.

In FY2011, despite the higher business activities during the year, operating activities used a total of US$1.3 million compared to US$13.7 million in the previous financial year. This is due mainly to the profit contribution of US$6.1 million, increase in stocks of US$4.0 million, increase in trade debtors, other debtors and prepayments of US$9.0 million and increase of US$6.2 million in trade creditors, accruals and other creditors.

Commentary

Into the new financial year, the Group is cautiously optimistic about its business prospects. However, with business pace slackening across many markets, it will continue to exercise prudence in its cost management and closely monitor developments in the markets where it operates.

Balance Sheet