Sino-Global Announces Fiscal Third Quarter and Nine Months Financial Results
- Revenues increased 39.3% for the nine months and 50.6% in the third quarter compared to prior year periods -
- Higher Chinese local port charges and negative exchange rate factors result in small third quarter loss -
- Strong balance sheet with $5.3 million in cash and working capital of $4.48 million -
BEIJING, May 13, 2011 /PRNewswire-Asia/ -- Sino-Global Shipping America, Ltd. (Nasdaq: SINO), a leading, non-state-owned provider of shipping agency services operating primarily in China, today announced its selected unaudited financial results for fiscal quarter and nine months ended March 31, 2011.
Highlights for the Nine Months and Third Quarter of Fiscal 2011
- Revenues for the nine months ended March 31, 2011 increased 39.3% to US$26.3 million, from US$18.9 million in the nine months ended March 31, 2010.
- Revenues for the third quarter ended March 31, 2011 rose 50.6% to US$9.1 million from US$6.0 million in the third quarter ended March 31, 2010.
- Gross margin decreased to 9.8% in the current third quarter compared to 13.6% in the third quarter of 2010.
- General and administrative expenses as a percentage of total revenues decreased to 11.6% from 16.6% in the third quarter of 2010.
- Net loss for the nine months ended March 31, 2011 was US$720 thousand compared to net loss of US$673 thousand in the first nine months of fiscal 2010.
- Net loss for the quarter ended March 31, 2011 was US$254 thousand compared to a net loss of US$268 thousand for the same period in fiscal 2010.
- Basic and diluted losses per share were US$0.05 and US$0.14 for the quarter and nine months of fiscal 2011, respectively, compared to basic and diluted loss per share of US$0.01 and earnings per share of US$0.01, respectively for the quarter and nine months of fiscal 2010. Earnings and losses per share are adjusted for the non-controlling interest.
"Sino-Global continued to see fast revenue growth for agency services from both existing strong demand in China for imported iron ore as well as the revenues generated from expanding our shipping agency services for vessels uploading at a port in Australia since 2009. Our strategy of expanding overseas shipping services has been successful. One of China's largest steel manufacturers, Baosteel, has added Sino Global to its list of service providers and we are now providing uploading services for its vessels which carry iron ore and coal from Canada and Australia to China. In the nine months ended March 31, 2011, our Australia agency revenues accounted for 14.5% of our total revenues. We anticipate that we will provide additional agency services for Baosteel vessels at the ports in South Africa and Brazil, shortly," stated Mr. Cao Lei, Sino-Global's Chief Executive Officer.
"The revaluation of the Chinese Renminbi ("RMB") against the U.S. dollar continues to hurt our results and we anticipate a further 5% -7% devaluation of the U.S. dollar in 2011," stated Mr. Zhang Mingwei, Sino-Global's Chief Financial Officer. "We have been able to offset some of the devaluation by successfully negotiating for about a 5% increase in agency service fees with our largest customer, Beijing Shourong Forwarding Limited, and, therefore, have partially mitigated its impact on our gross margin by about 3%. In addition, we expect that we could further mitigate the negative impact from the devaluation of the U.S. dollar by generating more agency service revenues from our overseas operation that are recorded in the currencies other than RMB."
Mr. Cao concluded, "We will continue to seek new business opportunities in diverse geographic locations and build upon our existing agency relationships to add additional PRC ports to our growing list of ports that we service. In line with our overseas strategy, we are expanding our footprint overseas and have established our credibility thru our PRC activities. In particular, we see tremendous opportunities in providing our agency service activities to vessels loading various commodities at ports overseas for delivery into China. We anticipate that our existing activities as well as the incremental revenues that we expect to generate from our overseas agency services will result in strong revenue growth in fiscal 2011 and beyond."
Selected Financial Results for the Third Quarter of 2011
Total revenues were US$9.1 million in the third quarter of 2011, an increase of 50.6% from US$6.0 million in the 2010 period. The number of ships that Sino-Global served increased 40.1% to 125 in the third quarter of 2011, from 88 in the year-ago period.
Cost of Revenues
Cost of revenues was US$8.2 million in the third quarter of 2011, an increase of 57.1% from US$5.2 million in the year-ago period.
Cost of revenues as a percentage of total revenues for the third quarter of 2011 increased to 90.1% from 86.4% in the year-ago period. Costs of revenues increased faster than revenues, resulting in the decrease of gross margins from 13.6% down to 9.9% for the comparative three months ended March 31, 2010 and 2011, respectively. The erosion in gross margins was by significantly higher port charges for larger vessels. Additionally, the foreign exchange rate of Chinese currency against the U.S. dollar increased during the period. The average foreign exchange rate for U.S. dollars against the Chinese RMB devalued approximately 3.6% in the third quarter of fiscal 2011 compared to the third quarter of fiscal 2010. As a result, expenses payable in RMB absorbed a greater percentage of revenues in U.S. dollars.
General and administrative expenses were US$1.05 million in the third quarter of 2011, an increase of 4.9% from US$1.00 million in the year-ago period. General and administrative expenses as a percentage of total revenues decreased to 11.6% in the third quarter of 2011 from 16.6% in the year-ago period.
Selling expenses were US$156 thousand in the third quarter of 2011, an increase of 306% from US$38 thousand in the year-ago period.
Operating loss was US$310 thousand in the third quarter of 2011 compared to an operating loss of US$136 thousand in the year-ago period. The operating loss for the third quarter of fiscal 2011 was primarily due to the increase in costs of revenues and in general and administrative expenses.
Financial income was US$28 thousand in the third quarter of 2011, compared to financial income of US$8 thousand in the year-ago period. The net financial income comes largely from interest income from money deposits in banks and by the foreign exchange losses recognized in the financial statement consolidation.
Income tax benefits were US$35 thousand in the third quarter of 2011, compared to income tax expenses of US$121 thousand in the year-ago period.
Net loss was US$254 thousand in the third quarter of 2011, compared to net loss of US$268 thousand in the year-ago period. Net loss attributable to Sino-Global Shipping America Ltd. was US$153 thousand in the third quarter of 2011, compared to net loss of US$23 thousand in the year-ago period.
Basic and diluted loss per share in the third quarter of 2011 was US$0.05, compared to basic and diluted loss per share of US$0.01 in the year-ago period.
Other Selected Data
As of March 31, 2011, the Company had US$5.3 million in cash and cash equivalents, compared to US$5.1 million in the year-ago period.
About Sino-Global Shipping America, Ltd.
Registered in the United States in 2001 and operating primarily in mainland China, Sino-Global is a leading, non-state-owned provider of high-quality shipping agency services. With local branches in most of China's main ports and contractual arrangements in all those where it does not have branch offices, Sino-Global is able to offer efficient, high-quality shipping agency services to shipping companies entering Chinese ports. With a subsidiary in Perth, Australia, where it has a contractual relationship with a local shipping agency, Sino-Global provides complete shipping agent services to companies involved in trades between Chinese and Australian ports. Sino-Global also operates a subsidiary in Hong Kong, China, to provide comprehensive shipping agent services to vessels going to and from one of the world's busiest ports.
Sino-Global provides ship owners, operators and charters with comprehensive yet customized shipping agency services including intelligence, planning, real-time analysis and on-the-ground implementation and logistics support. Sino-Global has achieved both ISO9001 and UKAS certifications.
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to purchase any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Any statements contained in this release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties as identified in Sino-Global's filings with the Securities and Exchange Commission. Actual results, events or performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as the date hereof. Sino-Global undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
For More Information
For a more detailed review of Sino-Global's financial results for the third quarter and six months ended March 31, 2011, please refer to the company's Security and Exchange Commission Form 10Q filing or Sino-Global's web site: www.sino-global.com.
Ms. Apple Liang
Stephen D. Axelrod, CFA
Wolfe Axelrod Weinberger Assoc. LLC
Tel. (212) 370-4500 Fax (212) 370-4505
SOURCE Sino-Global Shipping America, Ltd.