PRESS RELEASE
HTL'S Q1 2012 REVENUE UP 24.2%
SINGAPORE - 11 May 2012 - Amidst global economic
uncertainties and difficult and challenging business
conditions, mainboard-listed HTL International Holdings
Limited ("HTL"), one of the world's leading leather tanners
and sofa manufacturers, today reported a 24.2% rise in Q1
2012 revenue to USS$130.5 million compared with US$105.1
million in Q1 2011. Growth was recorded in all markets,
except Greater China. North America market led the growth
with an 81.4% increase in revenue of US$30.4 million against
US$16.7 million year-on-year, followed by Asia (excluding
Greater China) of 49.3% and ANZ at 27.8%.
The increase in sales turnover did not contribute to overall
Group profitability due to rising raw leather and production
input costs. Notwithstanding the increased tax expense of
US$2.4 million (Q1 2011: US$66,000), a net forex gain of
US$3.2 million (Q1 2011 net forex loss: US$3.2 million) saw
the Group posting an after-tax net profit of US$1.5 million,
as compared to a net loss of US$0.4 million in Q1 2011.
With trade and other receivables increasing by US$8.9 million
to US$70.7 million and total inventory by US$6.5 million to
US$176.0 million, the Group's net borrowings rose by US$16.4
million to US$69.5 million to meet working capital
requirements. Consequently, overall net gearing as at 31
March 2012 rose to 41.4% from 31.8% at 31 Dec 2011. The Group
also posted a negative free cash flow of US$15.7 million in
Q1 2012 against a positive free cash flow of US$4.0 million
in Q1 2011.
OPERATIONS REVIEW
Turnover from the Group's sofa business grew by 27.8% to
US$123.3 million in Q1 2012 versus US$96.4 million in Q1
2011. All markets, except Greater China, contributed to
increased turnover in Q1 2012, led by North America with
turnover of US$29.8 million, an increase of
80.8% over Q1 2011.
HTL's sales to Europe rose marginally by 8.0% to US$58.8
million against US$54.5 million in Q1
2011. Europe remained the largest single market of the Sofa
Business Unit's turnover.
As a result of the change in revenue recognition on sales to
our franchisees in Domicil Home in
Germany, the Home Furnishing Business Unit revenue fell by
16.5% to US$7.2 million in Q1
2012 versus US$8.6 million in Q1 2011. If not for this
change, HFBU's turnover for Q1 2012 would have been higher at
US9.7 million, an increase of 12.8% over Q1 2011. The
operating loss before net forex and tax declined marginally
to US$1.1 million (Q1 2011: loss US$1.2 million).
OUTLOOK
The Group had continued with its strategic increase in global
market share despite the difficult and challenging market
conditions in Q1 2012. However, business conditions remain
extremely volatile and challenging with continued pressure on
business margins as a consequence of escalating input costs
in raw materials and rising China production costs.
Furthermore, the pace of these increases has continued to run
ahead of product price increases to our customers. Therefore,
the Group expects its performance to remain challenging in
the next six months.
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About HTL International Holdings Limited
HTL International Holdings Limited is one of the world's
leading leather tanners and manufacturers of quality leather
upholstered furniture. It exports more than 95 per cent of
its products to over 50 countries, to Europe, Asia-Pacific,
USA and the Middle East. Its marketing offices are located in
the USA, UK, Germany, China, Japan, South Korea, Taiwan,
Australia and Singapore. It also has a sales distribution
network in the USA, UK, Germany, Japan and Australia.
For more information, please contact: Mr Tay Kheng Hee
Director, Corporate Services
Tel: 6864 7312
Handphone: 9664 9460
Email: kh.tay@htlinternational.com
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