Quote from today's BT
UNION Steel Holdings, a metal recycling company listed on
Singapore's mainboard in August last year, yesterday posted lower
net profit and sales for its first half-year ended Dec 31,
2005.
Citing lower sales to Indonesia and India, Union Steel said interim
turnover fell 11.84 per cent to $51.68 million from a proforma
$58.63 million in the previous corresponding period. This was
despite growth of sales to Bangladesh.
Six-month net profit dived by more than half to $2.23 million from
a proforma $5.19 million. One factor was the fall in gross profit
margin from 18.4 per cent to 15.1 per cent as a result of higher
purchase costs. Higher fuel prices also led to higher freight and
handling charges, resulting in a rise in operating costs.
Chief executive officer and co-founder Ang Yu Seng remained
optimistic despite the tough operating conditions in the first
half.
'We continued to be profitable although our profitability was
affected by the higher operating costs and lower sales to some of
our key markets,' Mr Ang said.
Looking forward, the rise in international fuel prices and the
increase in interest rates are expected to persist and put pressure
on Union's margins. Demand and prices for scrap metals and steel
products are also expected to remain volatile, he said.
'But as we continue to focus on building our core strengths in
recycling, we believe that we can overcome the challenges in the
months ahead. Barring any unforeseen circumstances, we expect the
outlook for the second half of FY2006 to remain profitable albeit
lower than the last financial year,' Mr Ang said.
