| FY2008 | FY2007 | change | |
| HK$'million | HK$'million | ||
| Revenue | 23,681.4 | 20,025.1 | +18% |
| Underlying profit before tax* | 2,723.3 | 3,557.5 | -23% |
| Net profit attributable to shareholders | |||
| - Underlying net profit* | 2,103.6 | 2,618.7 | -20% |
| - Reported net profit | 1,705.9 | 2,778.3 | -39% |
| Basic earnings per share | |||
| - Based on underlying net profit* | HK249.9 cents | HK313.9 cents | -20% |
| - Based on reported net profit | HK202.6 cents | HK333.0 cents | -39% |
| Full-year dividend per share | HK70.0 cents | HK100.0 cents | -30% |
| - Interim dividend per share | HK40.0 cents | HK30.0 cents | +33% |
| - Proposed final dividend per share | HK30.0 cents | HK70.0 cents | -57% |
| Dividend payout ratio | 35% | 30% | |
| Net asset value per share | HK$23.1 | HK$21.8 | +6% |
| Net gearing | 23% | 17% |
* Excluding:
2008 ¡V
(1) loss on disposal of convertible bond and interest in an associate of HK$189.7 million
(2) impairment loss on available-for-sale investments of HK$253.2 million
(3) discount on acquisition of HK$45.1 million
2007 ¡V
(1) gain on fair value change of conversion and redemption option derivative of HK$182.4 million
(2) loss on disposal and deemed disposal of interest in an associate of HK$23.7 million
(3) discount on acquisition of HK$1.0 million
Mr. Paul Cheung Kwok Wing, Chairman of the Company said: ¡§We achieved resilient results despite adverse business environment in the second half of 2008. Laminate and PCB divisions continued to be profitable and made positive contribution to earnings of the Group. During the year, we acquired a Taiwanese PCB shop in Suzhou which added about 5% to overall PCB production capacity. After accounting for the share of profits from our Hainan methanol joint venture, our chemical business delivered an impressive 19% year-on-year earnings growth and contributed about 36% of total Group earnings before interests and tax (¡§EBIT¡¨) in 2008. Our financial position continued to be strong. This clearly demonstrates that our persistent focus on building a balanced business portfolio with diversified income stream has created a concrete foothold against economic downturn.¡¨
Revenue (including inter-segment sales) for the laminate division declined 6% to HK$9,638.2 million. Earnings before interest and tax (¡§EBIT¡¨) was down 35% to HK$1,391.0 million over the previous year. The laminate division experienced an uptrend in demand in February 2009. As a result, all of our laminate plants operated at higher utilization rates in February 2009 as compared to January 2009. In addition, raw material costs reduction in Q1 2009 is expected to ease margin pressure as compared to that experienced in Q4 2008. The Group will allocate more resources to expand customer base and believe that the current operating environment is a good opportunity to increase market share as weaker competitors may exit the market.
Cushioned by strong performance in the first three quarters of 2008 and positive contribution from the newly acquired PCB shop in Suzhou, revenue for PCB division was up by 4% to HK$ 7,869.8 million with EBIT improved by 1% to HK$586.9 million against 2007. PCB division experienced improved capacity utilization and better inflow of orders after the Chinese Lunar New Year. Order bookings from the communication sector have shown the best performance as a result of investments in 3G infrastructure in China. HDI orders, most of which relate to mobile handsets, also saw strong growth. With successful acquisition of a PCB shop in Suzhou last year, the Group acquired 51% interests in its sister PCB shop in Dongguan, Guangdong province in March 2009. This immediately increases PCB production capacity by about 5%. To capture the opportunities arising from the downturn, the Group is actively in discussions with a few PCB manufacturers on the prospects of possible co-operation.
Driven by new production capacity mainly from the natural gas based methanol plant in Chongqing, phenol/acetone plant in Huizhou and coke/methanol plant in Hebei, revenue of chemical division soared 74% to approximately HK$9,464.3 million and EBIT increased 16% to HK$763.8 million in 2008. Apart from the above, share of associates results was up 25% to HK$369.8 million with bulk of which coming from our natural gas based methanol joint venture with China BlueChemical Limited.
The Group¡¦s commodity and specialty chemical plants are seeing the benefits from the economic stimulus initiatives in China as coke price has shown an uptrend and methanol price has stabilized since end of last year. Construction of the new acetic acid plant adjacent to the existing coke/methanol plant in Hebei province remains on track for trial production by the end of 2009. Using methanol and coke granules as feedstock, this acetic acid project with a monthly capacity of about 42,000 metric tonnes will further enhance the vertically integrated business model and is expected to bring in attractive returns.
Mr. Cheung concluded: ¡§Whilst the global economy faces significant challenges in 2009, our business outlook remains positive in the long term. As a major manufacturer for a wide range of key materials in China, we shall benefit from the enormous growth potential of this emerging market due to China¡¦s continuous urbanization and industrialization. A series of economic stimulus measures introduced by the Chinese government, in particular, subsidies for electronic products purchase in the rural area is likely to have a positive effect on the growth prospects for the Group. Coupled with our robust balance sheet, we believe that the Group will surmount current challenges and emerge from this downturn as an even stronger player.¡¨
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 60 plants in China. The Kingboard Group of companies also includes Kingboard Laminates Holdings Limited (HKEx: 1888), Kingboard Copper Foil Holdings Limited (listed on the Singapore Exchange) and Elec & Eltek International Company Limited (listed on the Singapore Exchange).