MEWAH INTERNATIONAL INC. Unaudited ... - Mewah Group

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MEWAH INTERNATIONAL INC.(Incorporated in the Cayman Islands. Registration Number: CR-166055)Unaudited Financial Statements For The Second Quarter and Half Year Ended 30 June 2011Operating Margin (OM)For Q2 2011, OM was US$22.6 million, 27.4% lower from US$31.2 million. For Bulk segment, OMdeclined by 26.9% to US$13.4 million and for Consumer Pack segment, OM declined 28.1% to US$9.3million. Bulk segment and Consumer Pack segment contributed 59.1% and 40.9% of total OMrespectively (Q2 2010: 58.7% and 41.3% respectively). For Q2 2011, OM per M.T. for Bulk segment andConsumer Pack segment were US$17.8 and US$40.6 respectively (Q2 2010: US$24.7 and US$61.8respectively).For H1 2011, OM declined by 15.2% to US$59.2 million. For Bulk segment, OM declined by 15.2% toUS$34.9 million. For Consumer Pack segment, OM declined by 15.1% to US$24.3 million. Bulk segmentand consumer pack segment contributed 59.0% and 41.0% of total OM respectively (H1 2010: 59.0%and 41.0% respectively). For H1 2011, OM per M.T. for Bulk segment and Consumer Pack segment wereUS$24.7 and US$57.2 respectively (H1 2010: US$27.8 and US$67.2 respectively).We experienced tough market conditions during the quarter due to prices trending down for ourproducts. As prices dropped during the quarter and the outlook for future prices remained bearish, weexperienced tendency on part of our customers to delay additional purchases and negotiate the pricesharder putting pressure on our margins. Our joint venture company, through its subsidiary, being theimporter and distributor of our consumer pack products in West Africa experienced slowed demandresulting in higher inventory carry cost and losses due to falling prices.Administrative expensesFor Q2 2011, administrative expenses were US$13.4 million, compared to US$8.1 million in Q2 2010.For H1 2011, administrative expenses were US$25.5 million, compared to US$20.2 million in H1 2010.The increases were primarily attributable to higher employee compensation and bank charges.Other operating gains/(expenses)For Q2 2011, the Group had other operating gains of US$13.4 million including foreign exchange gainsof US$13.3 million compared to other operating gains of US$4.1 million including foreign exchangegains of US$4.0 million in Q2 2010.For H1 2011, the Group had other operating gains of US$32.4 million including foreign exchange gainsof US$32.7 million compared to other operating expenses of US$3.9 million including foreign exchangelosses of US$3.6 million in H1 2010.Foreign exchange gains/(losses) arise mainly on account of hedging, are of operational nature and areconsidered for the calculation of operating margins.Finance costsFor Q2 2011, finance costs increased to US$3.4 million in Q2 2011 from US$2.4 million in Q2 2010. ForH1 2011, finance costs were US$6.1 million compared to US$4.1 million in H1 2010. The increases weremainly on account of higher borrowings for working capital requirements largely due to higher prices ofthe commodities the Group deals in.Income tax expenseIncome tax expense for Q2 2011 was US$1.0 million at weighted average effective tax rate of 16.0%compared to US$4.7 million in Q2 2010 at weighted average effective tax rate of 22.2%.Income tax expense for H1 2011 was US$4.9 million at weighted average effective tax rate of 18.1%compared to US$10.0 million at weighted average effective tax rate of 22.1% in H1 2010.Lower tax expenses for Q2 2011 and H1 2011 were primarily due to lower tax rate for Global TraderProgramme qualifying income for Singapore-based subsidiaries and change in the mix of results of oursubsidiaries in various tax jurisdictions.14
MEWAH INTERNATIONAL INC.(Incorporated in the Cayman Islands. Registration Number: CR-166055)Unaudited Financial Statements For The Second Quarter and Half Year Ended 30 June 2011Profit after taxFor Q2 2011, the Group achieved a profit after tax of US$5.1 million, 69.4% lower from Q2 2010. For H12011, the Group achieved a profit after tax of US$22.3 million, 36.8% lower from US$35.3 million in H12010.Profit after tax attributable to equity holders of the Company was US$6.0 million and US$23.1 millionfor Q2 2011 and H1 2011 respectively (Q2 2010: US$16.5 million and H1 2010: US35.3 million).Balance sheetInventoriesOn 30 Jun 2011, the Group had inventories of US$271.1 million representing inventories of 21.2 days(31 Dec 2010: US$244.0 million and 27.1 days respectively).Trade receivablesOn 30 Jun 2011, the Group had trade receivables of US$480.1 million representing trade receivables of36.6 days (31 Dec 2010: US$427.1 million and 44.1 days respectively).Trade payablesOn 30 Jun 2011, the Group had trade payables of US$218.0 million representing trade payables of 17.1days (31 Dec 2010: US$252.8 million and 28.2 days respectively).Cycle timeOn 30 Jun 2011, cycle time (inventories days add trade receivables days less trade payables days) was40.7 days (31 Dec 2010: 43.0 days).Other receivablesOn 30 Jun 2011, other receivables include US$15.5 million towards advance payments for capitalexpenditure projects (31 Dec 2010: US$9.5).Property, plant and equipmentProperty, plant and equipment increased from US$217.9 million on 31 Dec 2010 to US$258.2 million on30 Jun 2011, mainly as a result of the additions to capital expenditure for acquisition of industrial land inMalaysia, Consumer Pack Project to produce soap and shortening, Westport Expansion Project forexpanding specialty fats plant, Pasir Gudang Expansion project for a new specialty fats plant and SabahRefinery Project for building a new refinery.DebtOn 30 Jun 2011, Group borrowings were US$468.8 million giving debt to equity ratio of 0.88 (31 Dec2010: US$326.1 and 0.64 respectively).On 30 Jun 2011, net debt (Borrowings less cash and cash equivalents) was US$282.5 million, giving netdebt to equity ratio of 0.53 (31 Dec 2010: US$110.8 million and 0.22 respectively).15
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MEWAH INTERNATIONAL INC. Unaudited ... - Mewah Group

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