Billion Industrial achieves good results in H1

19 Aug '11

3 min read

Billion Industrial Holdings Limited (“Billion Industrial” or the “Company”, together with its subsidiaries, the “Group”; stock code: 2299), a leading developer and manufacturer of polyester filament yarns in China, announces its unaudited consolidated interim results for the six months ended 30 June 2011.

The global economy weakened in the first half of 2011, with debt crisis brewing in the European area and low economic growth in the United States. On the other hand, China's economy has remained among the few bright spots in the global economy, due to judicious macro-economic tightening to control credit and inflation, reducing the risk of a hard landing. According to China's National Bureau of Statistics, the country's gross domestic product increased by 9.6% in the first half of 2011.

During the review period, the Group's revenue increased by 65.7% year on year to RMB2.9692 billion, of which, domestic sales and exports accounted for 86.4% and 13.6% respectively.

Domestic sales increased by 65.2% year on year to approximately RMB2.5647 billion; export sales increased by 68.8% year on year to approximately RMB 404.6 million. The increase in sales was mainly attributable to the 13.3% year-on-year increase in sales volume in the first half of the year to 193,364 tons, and the 46.3% year-on-year increase in average selling price of products to RMB15,356 per ton. Gross profit increased by 307.3% year on year to RMB636.2 million.

Gross profit margin increased by 12.7 percentage points year on year to 21.4%. The increase in gross profit margin was primarily due to buoyant market demand for products and increase in selling price.

Mr. Sze Tin Yau, Chairman of Billion Industrial, said, “We achieved good results in the first half of the year because we capitalized on the strong global demand for polyester filament yarn. We did so by diversifying our products to enhance our pricing power, and expanding production capacity to satisfy demand. Moreover, we develop new products to expand our market share.”

Business Review Diversified products mix led to greater pricing power
Price fluctuations in the Company's primary raw material, purified terephthalic acid (PTA), were caused by crude oil price movements during the period under review. The Company passed the cost increases in PTA to customers, resulting in higher selling prices of the products during the first four months of the year. The PTA prices decreased slightly in May and then declined significantly in June, and the Company adjusted its product's selling price accordingly. Gross profit margin remained in a higher level because the Company enjoyed a greater pricing power.

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Billion Industrial Holdings Limited

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