| FY2009 | FY2008 | change | |
| HK$'million | HK$'million | ||
| Revenue | 23,772.5 | 23,681.4 | +0.4% |
| Underlying profit before tax* | 3,098.5 | 2,723.3 | +14% |
| Net profit attributable to shareholders | |||
| - Underlying net profit* | 2,239.0 | 2,103.6 | +6% |
| - Reported net profit | 2,396.0 | 1,705.9 | +40% |
| Basic earnings per share | |||
| - Based on underlying net profit* | HK$2.651 | HK$2.499 | +6% |
| - Based on reported net profit | HK$2.837 | HK$2.026 | +40% |
| Full-year dividend per share | HK75.0 cents | HK70.0 cents | +7% |
| - Interim dividend per share | HK30.0 cents | HK40.0 cents | -25% |
| - Proposed final dividend per share | HK45.0 cents | HK30.0 cents | +50% |
| Dividend payout ratio | 26% | 35% | |
| Net asset value per share | HK$25.5 | HK$23.1 | +10% |
| Net gearing | 22% | 23% |
* Excluding:
2009 ¡V
(1) net loss on disposal of subsidiaries of HK$82.6 million
(2) gain on disposal of partial interests in subsidiaries of HK$340.0 million
(3) impairment loss on available-for-sale investments of HK$111.8 million (net of the portion shared by minority shareholders)
(4) discount on acquisition of HK$11.4 million (net of the portion shared by minority shareholders)
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
Mr. Paul Cheung Kwok Wing, Chairman of the Group said: ¡§The Group saw impressive operational improvement in three core businesses from the second quarter of 2009 due to massive stimulus packages implemented by governments worldwide. The Group continued to gain growth momentum in China as a result of our strategic focus on expanding the domestic China market, which was less affected by the global economic downturn. The Group¡¦s laminate business continues to maintain its number one position in the global laminate market and the printed circuit board (¡§PCB¡¨) division is the largest PCB manufacturer in China. Both divisions were able to leverage on their unrivaled market position to advance market share and made significant contributions to Group¡¦s earnings. Underpinned by rebound in construction and industrial activities in China, chemical division¡¦s performance turned around sharply in 2H 2009 with higher revenue and profit. As a result, both Group revenue and profit grew substantially in 2H 2009 against the first half of 2009. ¡¨
Revenue (including inter-segment sales) for the laminate division declined 10% to HK$9,420.6 million. Earnings before interest and tax (¡§EBIT¡¨) increased 28% to HK$1,955.8 million against 2008. China was the single largest geographic market with domestic sales denominated in Renminbi (¡§RMB¡¨) reaching approximately 40% of the Group laminates sales in 2009. Laminate order bookings in the first two months of 2010 reflected continuous improvement against Q4 2009 with an uptrend of ASP against the previous quarter. The Group will scale up laminate production capacities by about 15% in 2010. To promote economic growth and achieve sustainable urban development, the Chinese government has initiated a new pilot scheme for the redevelopment of ¡§Three Olds¡¨ ¡V old towns, old villages and old factory buildings in Guangdong province. The Group has been in active discussions with local authorities in Shenzhen to explore the feasibility of redeveloping the plant in Longhua, Shenzhen.
Revenue for PCB division declined 8% to HK$7,236.6 million with EBIT increased to HK$607.2 million. EBIT margin improved to 8.4%. Similar to the laminate division, utilization rates for the Group¡¦s PCB plants improved to over 90% since Q3 2009. The strategic move to invest in two dedicated high density interconnect PCB (¡§HDI¡¨) plants in Kaiping, Guangdong province and Kunshan, Jiangsu province proved to be a successful one. HDI sales increased by over 3 times against the previous year and contributed positively to the PCB division earnings. The acquisition strategy continued to work well. The two PCB shops named Express at Suzhou and Dongguan acquired by the Group in February 2008 and March 2009 respectively integrated well with the Group. These two PCB plants contributed positively to the division¡¦s earnings in the current year. The division also enjoyed good order intake momentum since the beginning of 2010 and most of PCB plants were operating at full capacity in the first two months of 2010. Improving consumer confidence is expected to push demand growth for electronic products in most end market segments in 2010. In addition to organic capacity growth of approximately 15% planned in 2010, the Group will actively seek potential co-operation possibilities with other PCB shops in the market.
With strong demand for chemical products in 2H 2009, most of the Group¡¦s chemical plants operated near full capacity and achieved higher ASP. In order to secure stable feedstock supply for Huizhou phenol/acetone plant and further strengthen the vertically integrated business model, the Group strategically increased its stake in the chemical refinery plant in Yangzhou, Jiangsu province from 25% to 76% at the end of September 2009. Shortly after the take-over by the Group, the plant started to generate positive contributions to the chemical division earnings in the last quarter of 2009. In addition, Hebei acetic acid plant commenced trial production in September 2009 and continued to ramp up throughout Q4 2009. Backed by additional output from these two projects, revenue of chemical division (including inter-segment sales) increased 24% to HK$9,490.1 million and EBIT declined 11% to HK$590.9 million. Apart from the above, share of associates results was down 83% to HK$64.3 million with bulk of which contributed by the natural gas based methanol joint venture with China BlueChemical Limited, mainly due to lower methanol ASP against last year.
Massive government stimulus and infrastructure plans boosting economic growth and domestic consumption are expected to continue in China in 2010 which in turn will stimulate the demand for key chemical products including coke, methanol, phenol and acetone. Additional contribution from the Yangzhou chemical refinery plant and the Hebei acetic acid plant will definitely be the key growth drivers for chemical division in 2010. Furthermore, Huizhou phenol/acetone plant delivered attractive returns for the Group in 2009 due to strong demand for these specialty chemical products in China. Modification plans are currently underway to improve the production efficiency of the Huizhou plant with the aim to reduce energy consumption and emission by the end of 2010.
Mr. Cheung concluded: ¡§With over 60 manufacturing plants ¡V most of them located in China and sales offices stretching over 3 continents, the Group has established a strong foothold in the past 20 years with total asset value over HK$43.4 billion. With our experienced and dedicated management team, excellent business model with robust financial position, the Group is in an advantageous position to seize business opportunities and deliver attractive returns to our shareholders in future.¡¨
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).