Midas earnings surge 62% to reach S$3.8 mln in Q2 2016

Aluminium alloy extrusion products manufacturer for the passenger rail transport segment, Midas Holding posted a significant 61.8 per cent rise in earnings for second quarter of 2016. Total earnings reached at RMB18.7 million (S$3.8 million) from RMB11.6 million same period previous year. The increase was primarily driven by a 2.3 per cent rise in revenue to RMB382.8 million.

Aluminium alloy extruded products, the Group's core division, reported a 3.1 per cent jump in revenue to RMB381.4 million in the period under review. Midas Holdings attributed the improved performance to the transport industry demand which upped the contribution for the segment 62.2 per cent in Q2 2016.

The power industry and others segment comprising aluminium alloy rods and other specialised profiles for industrial machinery, accounted for 6.5 per cent and 31.3 per cent of the division’s revenue respectively.

The Group's overall gross profit margin inched higher at 27.8 per cent in 2Q16 up 27.7 per cent in 2Q15, in line with the slight increase in profit margin of the aluminium alloy extruded products division from 27.9 per cent to 28.0 per cent.

The share of profits from the Group's associated company CRRC Nanjing Puzhen Rail Transport (NPRT) also soared 53.3 per cent from RMB6.9 million in the previous fiscal to reach at RMB10.6 million in Q2. Midas attributed the growth to a reduction in its operating expenses and also a different project mix in the respective periods.

In last week Friday filing, Midas’s CEO Patrick Chew said Huicheng Capital Limited, which the group acquired on July 27 this year, will enable Midas to broaden its manufacturing capabilities into other types of aluminium alloy products, opening up scope for further revenue growth in the long term.

“Moving forward, Midas will continue to leverage our competitive advantages as a quality supplier to tap new opportunities both in China and in international markets,” asserted Chew.

“We will also leverage our new production capabilities arising from the acquisition of Huicheng Capital Limited to achieve diversification growth in other product segments.”

However, Midas declared no dividend for Q2. This is in comparison to the dividend of 0.25 Singaporean cents per share that the Group had declared in the corresponding quarter last year.

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