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March 28, 2019 10:42 AM

Sinomax sales rise, profis fall in 2018

Simon Robinson
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    Hong Kong — Sinomax, which issued a profits warning in early March 2019, had total sales of HK$ 4.3bn ($543m) in 2018, up 1.9 % on the previous financial year.

    Gross Profit across the business fell 6.9% reaching HK$ 772m in the 2018 financial year.

    This was because of the high price of TDI in 2018 and because of the delay to a contract in North America. The trade battle between the US and China also affected profits. Sinomax cut its research and development budget from HK$ 77m in 2017 to HK$ 70m in 2018 in a bid to curb costs.

    The company's China business had sales which rose 9.3 % between 2017 and 2018. They reached HK$ 2.6bn in the 2018 financial year. This compares with HK$ 2.3bn in the previous year.

    The company does not break out the profitability of its regional businesses. However, it did say that the Chinese business won a larger share of the market there.

    Meanwhile, according to a filing on the Hong Kong Stock Exchange, the company's North America business, sales fell 5.5% between 2017 and 2018. They reached HK$ 1.6bn in the 2018 financial year. This compares with HK$ 1.7bn in the previous year.

    The fall in sales was due to a delay in a contract with a new customer.

    At the same time it's Europe business experience a 45% fall in sales between 2017 and 2018. Sales reached HK$ 51m in the 2018 financial year. This compares with HK$ 93m in the previous year.

    Generally weak economies in Europe and the rest of the world were blamed for the poor performance of this division.

    The board does not recommend a dividend for the year.

    Currency conversion: XE.com

    Sinomax numbers H1 2019 (HK$ m)
    2019 2018 Change %
    Sales 1480 2038 -27.4%
    Gross Profit 365 347 5.2%
    Margin % 24.7 17.0 44.8%
    Regional sales changes
    China 908 1208 -24.8%
    NAFTA 548 800 -31.5%
    Europe +ROW1 24 30 -20.0%
    1 Rest of world
    Source: Sinomax
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