Mainboard-listed Kian Ann Engineering, one of the largest independent distributors of heavy machinery parts in Asia, announced it achieved a record profit attributable to equity holders of $13.2 million for the financial year ended 30 June 2010.

Kian Ann says the group’s performance was lifted by the gradual recovery of global economic conditions, which resulted in sales growth of 10.8% to $149.4 million in FY2010 from $134.8 million in FY2009. Improved demand from mining, forestry, palm oil and infrastructure sectors in Malaysia and countries outside Asia, especially Russia, South America and continents of Oceania, contributed to the better performance.

Group gross profit increased by $2.4 million or 6.9% to $37.9 million as compared with the previous financial year. Despite higher sales and gross profit recorded in FY2010, gross profit margin was reduced slightly from 26.3% to 25.4% as a result of lower selling prices amidst competitive market conditions in the first half of FY2010. However, gross profit margin improved significantly to 28.4% in Q4FY2010 as a result of higher demand of parts and higher selling prices.

For the year under review, the group’s other income increased by 432.7% to $1.4 million mainly due to foreign exchange gains.

Profit attributable to equity holders increased by a record 15.2% to $13.2 million in FY2010 as compared with $11.5 million in FY2009. Without taking into consideration the net positive impact from the Industrial Building Allowance claim recorded in FY2009, profit attributable to equity holders for FY2010 would have increased by 25.0% or $2.6 million.
Earnings per share for FY2010 was 3.02 cents (FY2009: 2.63 cents).

In view of the group’s strong performance, Kian Ann’s board has proposed a final dividend of 0.7 cents per share.