HTL International Holdings, one of the world’s leading leather tanners and sofa manufacturers, says the group has returned to full-year profitability with net profit of $48.3 million compared to a net loss of $20.3 million the year before.

Turnover in Q4 2009 rebounded strongly to $170.4 million, its first increase after four consecutive quarters of decline. The increase was driven by three markets, namely Europe, North America, and Australia and New Zealand.

For FY 2009 however, turnover declined 6.3% to $605.3 million from $646.2 million in FY 2008 mainly due to the cessation of finished leather sales to external parties in Q3 2009 and a contraction in sofa upholstery exports to North America.

In Q4 2009, HTL posted a net profit of $20.7 million against a net loss of $15.8 million year-on-year arising from high capacity utilisation, economies of scale and cost efficiency.

The directors are recommending a final as well as a special dividend of 2 cents per ordinary share each. Together with the interim dividend of 2 cents per ordinary share, the total dividends paid and proposed for FY 2009 will be 6 cents per ordinary share for a total payout of $24.7 million. This represents 51.1% of net profit of FY 2009.

HTL says Europe is still the group’s largest market, accounting for 65.5% (FY 2008 61.9%) of the sofa business unit’s turnover and contributing $347.7 million to the group’s turnover, an increase of 2.1%. Other than the decline in sales to North America which fell for the full year by 28.2% to $58.9 million, the turnover of the sofa business unit in 2009 remained largely unaffected by the global economic downturn. Furthermore, sales to North America in Q4 2009 also registered a positive turnaround of 11.5% against Q4 2008.

The home furnishing business unit more than doubled its network of shop-in-shop (SIS) stores in Europe, Asia and Australia to more than 200 in FY 2009. Turnover also continued to increase, rising by 5.4% to $60.3 million compared to $57.2 million in FY 2008.

Consequently, net loss was almost halved to $2.8 million from a loss of $4.8 million in FY 2008. Tight cost control exercised and positive contributions from Domicil in Germany and the doubling of SIS stores enabled Domicil to register a positive EBITDA of $1.1 million as compared to negative EBITDA of $989,000 in FY 2008.