Mr Paul Cheung Kwok Wing, Chairman of the Company said: “Underscoring the success of our strategic focus and management vision, we delivered another set of impressive results with robust growth for the first half of 2008. In addition, we were selected as one of the Top 2000 Global Companies by Forbes Magazine in April 2008. All these remarkable achievements attest to the concrete fundamentals of our core businesses and continuous efficiency improvements on the back of our vertically integrated business model. Our laminate division, being the largest laminate producer in the world, maintained 11.8% of the global laminate market share in 2007 whilst our printed circuit board (“PCB”) division remains the largest PCB manufacturer in China. Furthermore, the chemical division has secured a firm foothold in the fast expanding market in China and has become a strong impetus for the Group’s earnings growth.”
Revenue (including inter-segment sales) for the laminate division recorded 13% growth to HK$5,276.8 million. Earnings before interest and tax (“EBIT”) was up 2% to HK$1,060 million over the previous year. The Group is planning to add new production capacity in Lianzhou copper foil plant in the second half of 2008. In addition, the glass epoxy laminate plant in Jiangyin, Jiangsu province will increase monthly production capacity by 400,000 sheets in the third quarter of 2008 to enhance the Group’s market position in eastern China.
The Group acquired 80% interests in a Taiwanese PCB shop - Express Electronics (Suzhou) Company Limited located in Suzhou, Jiangsu province in February 2008. This company was turned around to profit shortly after the acquisition. In addition, Elec & Eltek accomplished continuous performance improvement in the first half of 2008. As a result, the PCB division’s revenue chalked up 19% growth to HK$4,093 million with EBIT increased 36% to HK$332.4 million. The Group is diligently building high density interconnect (“HDI”) PCB capability so as to take advantage of the growing business opportunities of compact hand-held devices. New production lines at dedicated HDI plants in Kaiping, Guangdong province and Kunshan, Jiangsu province are expected to commence pilot production by the fourth quarter of 2008.
Both revenue and EBIT for the chemical division achieved vigorous growth of 109% to HK$4,843.8 million and 173% to HK$721.8 million respectively while EBIT margin widened from 11.4% to 14.9% for the current period. The commencement of operations in late 2007 in both the methanol plant in Chongqing and phenol/acetone plant in Huizhou, Guangdong province started to bear fruit. Bolstered by additional coke production capacity from phase two of the coke/methanol plant in Hebei and thriving market conditions of coke and methanol in China, the plant’s EBIT contribution doubled against the same period last year. In addition, share of associate profit from CNOOC Kingboard Chemical Limited increased 54% to reach HK$ 262.3 million.
Mr Cheung concluded: “The chemical division continues its expansion plan with several major chemical projects in the pipeline. The Hebei coke phase two expansion started trial production in the first half of 2008. The methanol production capacity associated with this expansion will commence production in the second half of 2008 with additional methanol output of 8,700 tonnes per month. The integrated project with coal mining and coke/methanol facilities in Lvliang, Shanxi province is on schedule for production in 2009. Construction of a new acetic acid plant adjacent to the existing coke/methanol plant in Hebei province is currently underway. Utilizing coke granules and methanol as feedstock, this acetic acid project with production targeted in late 2009 will further enhance our production capabilities of downstream chemical products and is expected to generate attractive returns.”
Financial Highlights| Six months ended June 30, | ||
| 2008 | 2007 | |
| HK$'million | HK$'million | |
| Turnover | 12,377.8 | 9,021.9 |
| Profit Before Tax* | 2,265.8 | 1,765.1 |
| Net profit attributable to shareholders* | 1,758.3 | 1,301.8 |
| Basic Earnings per share* | HK$2.086 | HK$1.562 |
| Interim dividend per share | HK40.0 cents | HK30.0 cents |
About Kingboard Chemical
Kingboard Chemical Holdings Limited (HKEx: 148) is a global leader in laminate and printed circuit board as well as a major chemical supplier in China. The Group’s core manufacturing capability comprises an integrated network of more than 50 plants in China. The Kingboard Group of companies also includes Kingboard Laminates Holdings Limited (HKEx: 1888), Kingboard Copper Foil Holdings Limited and Elec & Eltek International Company Limited (both listed on the Singapore Stock Exchange).