Hong Kong, Nov 27, 2014 - (ACN Newswire) - The board of directors (the "Board") of Agritrade Resources Limited (the "Company", stock code: 1131) is pleased to announce the unaudited condensed consolidated interim results of the Company and its subsidiaries (the "Group") for the six months ended 30 September 2014.
2014 Interim Results Highlights
- The Group's revenue recorded HK$ 576.1 million- Gross profit of the Group was HK$156.4 million- Profit attributable to equity holders of the Group soared by 25% and recorded HK$ 79.1 million- The Board declared an interim dividend of HK 1.0 cent per ordinary share for the six month ended 30 September 2014
Business ReviewIn the second half of 2014, facing the continuous decline of international coal price, the selling prices of Indonesia coal is affected by the adverse market condition, the Group has recognised production plan for cost saving and improve efficiency. It includes infrastructure investment and development through enhancing the fleet of mining equipment such as stockpiling facilities and Jetties loading facilities.
To diversify the business and risk, the group has acquired 12 vessels for Indonesia inland waterway and controlling part to stabilise operation efficiency as well as improve long term production cost saving. The Group is benefited from optimum efficiency by self-operating fleet and independent logistics services providers.
Exclusive right on Ex-Pertamina Road usage is beneficial to the company, ongoing continuous maintenance on existing coal hauling road and jetty loading facilities achieve long term cost saving and increased transportation efficiencies. Twinned with its strategic decision, the Group is well-equipped to support sustainable production and seamless delivery of SEM coal, its resources and reserves are expected to further increase with additional exploration in future.
Financial OverviewFacing the continuous drop in selling prices of Indonesian coal under adverse market condition, the Group is pleased to have achieved a stable performance for the six month ended 30 September 2014, with a moderate decrease in both revenue and profit before tax. For the period under review, the Group recorded a turnover of approximately HK$576 million, a decrease of 7.1% as compared to the same period last year. The decrease in turnover was primarily due to the decline in coal price. The profit attributable to the shareholder soared by 25% to HK$79.1million compared to the same period in the last financial year. The group's profitability is buoyant by the sustainable grow of coal demand from South Asian countries and the table increment of SEM's coal production capacity. For the period of April to September 2014, SEM coal mine increased its average monthly production to approximately 350,000 tonnes as compared to an average monthly production of approximately 306,000 tonnes for the same period a year ago.
Future ProspectWith the investment in equipment and logistics infrastructure, including road upgrading and Jetty loading facilities, the Company is well-positioned to meet our coal production target. Combined with the Group's strong customer base, marketing efforts and the growth of low CV coal demand in India and Asian region, the demand of SEM coal are expected to increase in coming years.
In order to maintain the upspring growth development of the group, the management decided along with continuous focus in the coal production, also diversify the group's shipping business and extend into the logistics and storage operation for petrochemical products in the Southeast Asia. It is believes such diversification will generate stable diversified revenue and sustainable cash flows for the Group. In that direction, Rimau Shipping Pte Limited, an indirectly wholly-owned subsidiary of the Company entered into a memorandum of agreement to acquire a VLCC Supertanker (the "Target Vessel") at a competitive price of US$22 million (approximately HK$170,500,000.00) on 12 November 2014. The Target Vessel is expected to be delivered to Rimau Shipping Pte Limited on or before 31 December 2014 and starts contributing to the Group in 2015.
About Agritrade Resources Limited
Agritrade Resources Limited ("Agritrade" or the "Company") is listed on the Main Board of The Stock Exchange of Hong Kong Limited (1131.HK). In 2010, the Company successfully acquired and has since been operating PT Senamas Energindo Mineral ("SEM"), a 2,000-hectare coal mine in Central Kalimantan, Indonesia. The Company produces its own brand of SEM coal, a sub-bituminous, low-sulphur, low-pollutant thermal coal with calorific value (as received basis) of 3,800 kcal/kg in its raw form. Currently, 1,200 Ha of the 2,000 Ha mining concession has been explored under the Australasian JORC (Joint Ore Reserves Committee) review by DMT Geosciences Limited. The Company prudently estimates at least 120 million tonnes of reserves for the entire 2,000 Ha mining concession. Together with its subsidiaries, Agritrade provides integrated supply chain solutions including coal origination, processing and logistics services.
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