t6pr.com - Victory City International Holdings Limited (539)

Hong Kong, December 12, 2002 - Hong Kong's leading knitted fabrics manufacturer, dyeing and finishing services provider, Victory City International Holdings Ltd. (SEHK: 539) today announces its six months unaudited results ended September 30, 2002. Despite the very unfavourable global economic conditions, the Group's turnover rose substantially by 41.9% to HK$583 million. Profit attributable to shareholders was HK$44.8 million, representing a 175% growth as compared with the corresponding period last year. Basic earnings per share also increased from 5.2 cents to 12.5 cents for the period under review. The Board of Directors recommend the payment of an interim dividend of HK3.0 cents with scrip option.

The significant growth is a result of the Group's continuous endeavour to strengthen its core business operations in fabric sales as well as its capabilities to leverage on the strong sales growth in garment trading. The Group's profitability has been able to achieve through its successful implementation of cost control, enhancement of productivity as well as its efforts in reducing financial expenses. A major cost-saving measure was also achieved by reducing fuel costs substantially with the coal-fired facility commencing operation since December 2001. As a result, the gross profit margin of the Group's core business in production and sale of knitted fabric increased to 23.4% as compared to 20.3% for the financial year ended March 31, 2002.

"Our Group's future profitability enhancement will continue to come from our strong core business of fabric sales and continuous business growth in garment trading. We will continue to build on our strength and enhance our leading position in knitted fabrics manufacturing and garment trading through operation enhancement as well as product and market diversification." said Mr Chen Tien Tui, Managing Director of Victory City International Holdings Ltd.

The Group's garment trading business also registered a remarkable growth for the six months ended September 30, 2002. Turnover surged to HK$230 million, representing a 91.3% growth as compared to the same period last year. The substantial turnover growth in garment trading was achieved through the successful sales and marketing effort of the Group's dedicated team in recruiting and retaining new customers. Under the landed-duty-paid programmes, by providing total logistic solutions to customers, the Group's garment trading business was able to enjoy high profit margins from its direct sales to the buyers in US and Canada.

The Group's strong production base in Xinhui is currently equipped with a production capability of a monthly output of 4.5 million pounds of knitted fabrics. The Group pursues to drive growth through continuous production capability enhancement with a target monthly output from Xinhui factory reaching 6 million pounds by mid-2003.

"The Group is committed to the growth strategy of continuous development of our core business. With the enhanced production capability and support from our dedicated team, the Group is well equipped to stay competitive and well positioned to capture growth as the global economy slowly recovers," concluded Mr Li Ming Hung, Chairman of Victory City International Holdings Ltd.

Financial Highlights

	Six months ended September 30,
	2002	2001
	HK$ '000	HK$ '000
Turnover	582,586	410,574
Profit from operating activities	59,527	24,203
Net profit attributable to shareholders	44,808	16,285
Earnings per Share
- Basic	HK12.5 cents	HK5.2 cents
- Diluted	HK11.0 cents	N/A

Issued by :
Victory City International Holdings Limited

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