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Novo Group, the global steel and coal supply-chain management company, says net profit for financial period ended 30 April 2010 (FY2010) climbed 667% to US$12 million ($16.5 million) compared to net profit of US$1.6 million in FY2009.
Revenue for FY2010 was US$403 million, a 23% decline from FY2009 revenue of US$523.7 million but gross profit margin in FY2010 increased to 13.8% from 8.8% in FY2009.
The main bulk of the group’s revenue in FY2010 came from sales of its raw materials such as iron ore and coal. In FY2009, raw materials contributed 24% of the group’s revenue but in FY2010 the percentage share of raw materials to group revenue increased to 60%. This growth is propelled by the strong demand for raw materials in China in FY2010.
Sales of finished products in FY2010 accounted for 24% of the group’s revenue, while in FY2009 it contributed 49% to Group revenue. Semi-finished products contributed 15% to the group revenue from 27% contribution in FY2009. Finished products comprise of Hot and Cold rolled coils, Hot rolled plates deformed bars and wire rods while Semi finished are billets and slabs.
China was the leading market for the group in FY2010 accounting for 71% of the group’s revenue while revenue coming from South East Asia was at 29%.
The group handled a total of 2.6 million tonnes of steel products in FY2010 representing an increase of 35.7% from FY2009 tonnage of 1.9 million tonnes.
On a quarterly basis comparison, group revenue decreased by 42.7% to US$ 57.3 million in 4Q FY2010 from US$100.1 million in 4Q FY2009. The decrease in revenue is due to the 63% decline in the revenue of the group’s international steel trading business which stood at US$36.6 million in FY2010 from US$99.9 million in FY2009.
This is attributed to the reduction in the demand for raw materials and semi-finished products in China in 4Q FY2010. Despite the decline in its top line, the group’s net profit in 4Q FY2010 surge 308.7% to US$1.9 million from US$0.5 million in 4Q FY2009.
The group is proposing a final cash dividend of 0.5 cents per share.
