YHI's overseas ops drive Q2 profit up 87%
By SAMUEL EE
YHI International is on a roll with its tyre distribution business accelerating to post an 86.7 per cent jump in net profit to $11.0 million for the second quarter ended June 30, 2006.
Second quarter turnover grew 19.2 per cent to $101.9 million, primarily because of an increase in tyre sales in the group's Asean and Oceanic operations.
To further tap this demand, YHI yesterday announced it would launch its own proprietary brand of tyre called Neuton.
'Neuton will be launched in the fourth quarter in various geographical areas, targeting existing and new networks,' said YHI group managing director Richard Tay. 'We believe that this new brand of tyre complements our existing product range and will potentially reap good earnings for the group.'
YHI distributes automotive and industrial products. Among the brands it represents are Yokohama tyres, and Enkei and OZ rims. It is also an original design manufacturer (ODM) of alloy wheels, producing them for Enkei, OZ and other international brands.
Mr Tay said the group's wheel distribution business has also grown. One notable increase is to the US market, after a tie-up there called Koning American Corp was formed last October. As a result, Q2 turnover from the distribution business rose 30.3 per cent to $78.2 million from the previous corresponding quarter.
For the first half, turnover was up 20.8 per cent to $197.7 million. Interim net profit rose 46.1 per cent to $16.0 million. Earnings per share for the first half rose to 2.75 cents from 1.88 cents previously. The net asset value was 23.47 cents, up from 22.22 cents six months ago.
But YHI's manufacturing business continued to be affected by rising aluminium prices in the second quarter. Q2 turnover from the manufacturing business fell 7.1 per cent to $23.7 million. But overall gross profit margin was maintained at about 22 per cent despite the 25-30 per cent jump in the average price of aluminium ingots compared with last year.
'The first half was seriously affected by this but we are recovering after increasing our product prices by 5-8 per cent in April and May,' said Mr Tay. 'We have also restructured to successfully reduce production costs and the second half will look better because ingot prices have softened.' The average price is now 20 per cent higher than last year.
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