The Group achieved satisfactory operating results for the year with gross profit margin improved to 22.9% from 21.1% last year through stringent cost control and enhancement of the product mix. The adjusted consolidated operating profit before tax was HK$271.4 million, a 56.2% increase over the previous year. However, due to the new Hong Kong accounting standards which came into effect during the current fiscal year, certain non-recurring expenditure of approximately HK$73.6 million, which is the expenditure on the acquisition of certain business database in relation to the setting up of two new PRC joint ventures, was included this year. As a result, net profit attributable to shareholders decreased by HK$64.0 million to HK$131.4 million as compared to previous year.

A final dividend of HK1.5 cents was declared, which together with the interim dividend of HK1.0 cent, represents a 25% year-on-year increase in full-year dividend, excluding the special dividend of HK3.0 cents paid in past fiscal year, and a dividend payout ratio of 45.5%.

"Our Group's future profitability enhancement will continue to come from both demand-driven business growth and increased production efficiency arising from economies of scale and reorganization of the manufacturing chain. We will continue to strengthen our leading position in the world's aluminum extrusion industry through capacity expansion, product and market diversification, enhanced R&D and mergers and acquisitions," Mr Kwong Wui Chun, Chairman of Asia Aluminum Holdings said.

The PRC continues to be the Group's largest and most promising market. While the country's infrastructure and property development activities are expected to continue to gain momentum, national projections also forecast that 40 new airports will be built in the next five years. During 2002, contracts have already been secured for Guangzhou Huadu Airport, Beijing People's Great Hall renovation work, Shanghai World Trade International Centre, five massive residential projects in Shanghai and others such as The Grand Opera House in Beijing are currently under negotiation. In Hong Kong, the Group has obtained supply contracts for the Science and Technology Park, the redevelopment project in Mongkok Bird Street and Kowloon Station Phase II. Examples of current high-profile projects also include Nina Tower, Cyberport and IFC Tower Phase II.

The Group further strengthened its alliance with Indalex Aluminum Solutions Group, the second largest aluminum extruder in North America, to optimize the utilization of common resources and to expand the global market share of both parties. Besides expanding sales to North America, the Group plans to leverage this alliance to make advances into such high potential markets as Europe and Japan.

Growing demand of aluminum extrusion products in transportation and consumer household sectors has earned the Group contracts from non-construction clients including Shanghai CIMC Reefer Containers and Sumitomo Corp. As part of the Group's dedicated efforts to research into and develop high-margin, high-end products with complex applications to tap new sectors, it is installing new production lines for such new products as "brite dip" products and downstream finished goods such as aluminum swing doors and bathroom enclosures. The new production lines will become fully operational in the first quarter of 2003.

On the supply side, the Group is also working with its suppliers on developing a fully integrated supply chain for the direct delivery of aluminum billets to its production facilities to shorten lead time, reduce unnecessary production steps and achieve more effective control over inventory and logistics costs. Negotiations with a number of smelters and suppliers are currently on-going with the aim of reorganizing part of its procurement and production phases to achieve further cost savings during fiscal year 2003.

In the stainless steel products division, the Group has recently improved the production facilities in investing in a new cold-roll steel line. This has significantly enhanced the competitiveness of the Group's stainless steel products and it is expected to boost the sales of this division substantially for fiscal year 2003 and beyond.

Mr Benby Chan, Managing Director, Asia Aluminum Holdings, added: "We will continue to pursue a multi-faceted growth strategy in our core aluminum extrusion business through a combination of vertical and horizontal expansion. The two new PRC joint-venture aluminum extrusion plants which we acquired last year performed well. We believe they will become major profit contributors to our Group in the near future. To capture existing demand and maximize sales and profits, we have outsourced some orders to a few selected extrusion factories, meanwhile continuing the identification and review of acquisition targets to achieve our goal of being a global leader in the industry with a strong operating platform in the PRC."

The Group's liquidity position remains strong with available undrawn banking facilities and bank deposits of HK$447.1 million and HK$1,328.5 million respectively as of June 30, 2002. The ample financial resources available to the Group will provide adequate funding for the Group's operational requirements and also put it in a favourable position to take advantage of potential acquisitions.

Mr Kwong concluded: "We take pride to announce our inclusion in the 'World's 200 Best Small Companies for 2002' polled by Forbes Global. It is an honour which reflects the quality and dedication of our team, to whom we owe our success."

About Asia Aluminum
Asia Aluminum Holdings Limited (SEHK: 930) is the largest aluminum extruder in Asia, operating five extrusion plants in Nanhai, PRC with a total annual production capacity of 120,000 tonnes. The Group has established an equity alliance with Indalex, the second largest aluminum extruder in the US. It was recently named one of the "World's 200 Best Small Companies for 2002" by Forbes Global.

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