Sinotel Technologies, the provider of wireless telecommunications infrastructure and solutions in China, says the group has posted a 2.2% net profit of RMB42.5 million ($8.5 million) for the 2nd quarter ended 30 June 2010 (2QFY2010) compared to RMB41.6 million in 2QFY2009. Half year earnings (1HFY2010) rose 1.2% to RMB71.2 million, compared to the same period in 2009.

The group posted an increase in revenue of RMB26.4 million (+18.6%) and RMB48.2 million (+20.2%) for the periods 2QFY2010 and 1HFY2010 respectively. The stronger topline growth was achieved on the back of increased sales of equipment, higher contribution from the Emergency Mobile Communication System (EMCS) business, and more contract wins from system integration projects.

Overall gross profit margins for 2QFY2010 and 1HFY2010 were 37.8% and 38.0%, respectively, which were marginally lower than the corresponding periods in 2009. This was partly attributed to the higher contribution from the sales of equipment which commands lower margin.

Despite a more competitive landscape, the group posted a slight increase in net earnings of 2.2% and 1.2% for the periods 2QFY2010 and 1HFY2010, respectively. Net profit margins were 25.2% and 24.8% for the periods 2QFY2010 and 1HFY2010, respectively, which were slightly lower than the corresponding periods in last year.

Sinotel expects to remain profitable for the rest of the financial year.