LEE KEE first half profit up 157% HK$26mn

The company continues to fortify all areas of operation to ensure further development in the future amidst volatility in the global economy.

LEE KEE Holdings Limited (“LEE KEE”), a leading metals supply chain company, on Friday announced the unaudited interim results of the Company and its subsidiaries (collectively “the Group”) for the six months ended 30 June 2011 (“Interim Period”).

Despite subdued global economic activity, LEE KEE managed to increase its gross profit from approximately HK$54.5 million to approximately HK$75.8 million. Profit attributable to the equity holders of the Company substantially improved to approximately HK$26.0 million for the Interim Period, up from approximately HK$10.1 million for the corresponding period of 2010 – mainly achieved through effective inventory management. However, revenue declined by 8.9% from the same period last year, down from approximately HK$1,858 million to approximately HK$1,693 million. Concurrently, volume sold by LEE KEE tumbled from 86,520 metric tones for the corresponding period of 2010, to 76,320 metric tonnes for the first half of 2011, representing a year-on-year decrease of 11.8%. 

Basic earnings per share were HK3.14 cents (first half of 2010: HK1.22 cent). The Board has decided to declare the payment of an interim dividend of HK1 cent per share (first half of 2010: HK1 cent per share).

Ms. Clara Chan, Chief Executive Officer of LEE KEE, said, “The global economy continued to show signs of volatility during the period under review, with the United States, Europe and Japan in particular facing different yet equally thorny issues. Despite the drop in turnover and tonnage sold, LEE KEE has successfully combated generally weak market conditions and achieved strong bottom line growth thanks to effective inventory management. We also continued penetrating the PRC domestic market, upholding and expanding our foothold while laying a solid foundation for the Group’s future growth. It is also worthy of note that during the review period, LEE KEE’s zinc alloy sales volume represented approximately 72% of the PRC’s total zinc alloy import volume.”

In the aftermath of the severe earthquake and tsunami that struck Japan, many factories suspended production. As a result, the manufacturing sector in China suffered from falling exports, particularly during the second quarter of the year. Nevertheless, exports to Japan will gradually recover due to the one-off nature of the natural disaster, and will be boosted by anticipated strong demand arising from rebuilding the stricken areas of Japan. 

Capitalising on China’s burgeoning economic growth, which is driven by domestic consumption, increasing urbanisation, and further infrastructure developments that include honing of the railway and highway networks, LEE KEE is geared to capture forecasted strong domestic demand for metal processing products, according to a LEE KEE report.

Priding itself on expertise in the metal industry, solid financial foundation, professional teamwork and sound operational structure, the LEE KEE Group will continue to fortify all areas of operation, ensuring further development in the future. In addition to its sales and distribution centres in Wuxi, Shenzhen and Guangzhou, a new branch office in Chengdu, Western China, has been established through which the Group will be able to seize business opportunities presented within the district, while continuing to integrate Promet’s competitive edges with its service offerings. LEE KEE will also closely monitor Eastern China to explore any opportunities that may arise in the future.

Ms. Chan concluded, “Looking ahead, LEE KEE is poised to rekindle its growth momentum once the global economy shows signs of resurgence. When such signs appear, we will react with the same vigour, commitment and vision that enabled us to develop our unrivalled range of customer services, market intelligence, technical support, global sourcing ability and diverse group of loyal customers.”