NVC Announces 2010 Interim Results

USA - English

• USA - English

    HONG KONG, Aug. 25 /PRNewswire-Asia/ --



    Financial Highlights:

                                            For the 6 months ended 30 Jun
                                          2010            2009        Change
                                      US$ '000        US$ '000            (%)
    Sales revenue                      204,034         109,780        +85.9%
    Gross profit                        55,377          27,869        +98.7%
    Gross profit margin (%)               27.1            25.4    +1.7 ppts.
    Operating profit                    31,796          13,687       +132.3%
    Profit/ (Loss)
     attributable to
     owners of the Company              25,934          (8,590)          N/A
    Net profit margin (%)                13.3%             N/A           N/A
    Basic earnings/
     (loss) per share             1.1 US cents   (0.4) US cents          N/A

NVC Lighting Holding Limited ("NVC" or the "Company", together with its subsidiaries, the "Group", HKEx stock code: 2222), the leading supplier of lighting products in China, today announced its interim results for the six months ended 30 Jun 2010 ("the Period under Review").

During the Period under Review, benefiting from the favorable environment with the recovery of the economy and the implementation of efficient business strategies, the Group recorded outstanding business performance. Sales revenue increased by 85.9%, reaching US$204 million (approx. HK$1.59 billion). Gross profit rose to US$55.38 million (approx. HK$430 million) with an increase rate of 98.7%. Operating profit is up by 132.3% to US$31.80 million (approx. HK$247 million). Profit attributable to owners of the Company surged to US$25.93 million (approx. HK$202 million). The Board recommended the payment of an interim dividend of 2 HK cents per share for the six months ended 30 June 2010.

Concerning the Group's outstanding business performance, Mr. Wu Changjiang, Chairman, CEO and Executive Director of NVC said, "During the Period under Review, the Chinese economy maintained its rapid growth momentum. The lighting industry showed certain signs of growth along with the recovery of the macro-economy. The Group fully grasped the market opportunities with effective business strategies such as promoting the brand profile of NVC and furthering its sales, production and product R&D efforts, with a view to maintain the Group's leading position in the lighting industry and deliver outstanding results. The Group was successfully listed on the Main Board of the Stock Exchange of Hong Kong Limited on 20 May 2010, symbolizing a new milestone for the Group's further development, and the proceeds from which allowed us to accelerate the pace of corporate development, enhance our core competitiveness and profile and consolidate our leading position in the industry."

During the Period under Review, rapid growth was recorded for the Group's three product segments. Revenue from luminaire products increased by 88.1% to US$99.07 million (approx. HK$770 million). For the lamp products, revenue increased 77.3% to US$78.03 million (approx. HK$607 million) as compared to the corresponding period in 2009. And the revenue of lighting electronic products segments was US$26.93 million (HK$209 million), with an increase of 105.7%. With our efforts in improving our manufacturing efficiency and enhancing the vertical integration of products and the scale of the economies, the Group's gross profit margin increased from 25.4% in the first half of 2009 to 27.1% this year.

During the Period under Review, the Group's s retail network further expanded. 405 NVC outlets were newly established. After taking out 216 NVC outlets which were closed down or re-organized, the number of net increase for NVC outlets was 189, among which 51 were in the provincial capital cities, 20 were in the municipal cities and 118 were in the counties. As at 30 June 2010, the Group had a total of 2,650 NVC outlets. The Group furthered its effort in strengthening its control over its exclusive regional distributors and NVC outlets during the period. In the first half of 2010, during the first half of 2010, the Group maintained the original 36 exclusive regional distributors and has strengthened its control and guidance over their implementation of the Company's policy, so as to perfect the price management system and optimize the product portfolio. During the Period under Review, the Group has newly developed 18 large Professional engineering customers with transaction value exceeding RMB1 million and 46 key accounts, revenue grew by 120.4% as compared with the corresponding period of 2009.

In terms of NVC brands sales in international market, the Group continued to develop new customers and strengthen the development of its sales channels. With respect to emerging market such as Asian and African countries, the Group has adopted strategy with reference to its China model to develop new distributors. With respect to the markets with well-established channels such as Europe and the USA, the Group has expedited its pace in brand building and cooperated with experienced channel operators. For example, UK NVC has gradually switched to the wholesales of NVC brand products from the sole OEM sales model and had successful cooperation with a number of well-known local electrical appliances chain stores, thereby NVC brand products gained access to the mainstream channels.

The Group has been placing strong emphasis in raising the brand profile, marketing and promoting the NVC brand, which included active participation in different industry seminars and forum in China, and participated in various overseas promotional activities, in order to strengthen and promote NVC's professional brand image.

Concerning the Group's development in the second half year, Mr. Wu said, "In the later half of 2010, China will be hosting two international events, namely, the Shanghai World Expo and the Guangzhou Asian Games. The resultant economic benefits for domestic enterprises from these two major events will be immeasurable. They will also bring large amount of orders and offer a showcase platform for China's lighting industry. In order to grasp the business opportunities ahead, we will continue to secure our leading position in the industry through technological transformation and introduction of advanced production facilities. On the other hand, the global's concern on energy saving and emission reduction has directly driven market demand to energy-saving products. We will keep increasing our production capacity on energy-saving lamp products and focus on the production of energy-saving products, further consolidate the NVC's green brand image. We will also make our best efforts to further brand building, increase investment in the research and development of products, improve production efficiency and product quality and introduce the most advanced technologies in the world, so as to maintain our leading position in technologies of the lighting industry."

"We will also further expand the coverage of our distribution network, penetrate deeper into existing markets and explore new distribution models. We will also keep an eye on potential enterprises, continue to perfect our product structure and market system through merger and acquisition activities. We strive to achieve the goal of 'Becoming a world famous brand and the best player in the industry, bring the best return to our shareholders," Mr. Wu concluded.

About NVC

NVC is a leading lighting products supplier in China, and was listed on the Stock Exchange of Hong Kong Limited on 20 May 2010. According to the Report from China Association of Lighting Industry (CALI), the Company is the largest domestic lighting brand supplier and ranked the second amongst all lighting brand suppliers in China based on 2009 sales revenue. The Company designs, develops, produces, markets and sells a variety of lighting products, including luminaire products, lamp products and lighting electronics products. NVC products were sold through a nationwide sales network of 36 exclusive regional distributors and 2,650 NVC outlets covering 31 provinces, municipalities and autonomous regions in China.

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SOURCE NVC Lighting Holding Limited