Gongyou Machines Ltd.
Gongyou Machines Ltd.: Results per 30.06.2010 – Trend towards Recovery
Gongyou Machines Ltd. / Key word(s): Half Year Results Gongyou Machines Ltd. – Results per 30.06.2010 – Trend towards Recovery After the Global crisis hit Gongyou badly in the previous financial year, we observed a steady trend towards recovery during the reporting period. Demand in China improved to a level where we operate already at full capacity for the products designed for the Chinese domestic market. The Chinese market, however, is more competitive and brings lower margins than export markets. Export markets recover only slowly, especially our previously largest market, Russia, is only improving very recently. Demand for our machines designed for international markets, which are our technologically most sophisticated high margin products, is therefore still only moderate. In total, our sales recovered by more than 19% to RMB 143 million and Gross Profit increased by 54% to RMB 18 million. Our net loss fell by 89% to only RMB 1.56 million. Excluding provisions on bad receivables, which were caused by sales to clients who are affected by financial difficulties since the crisis period, we would have already entered the profitability zone during our last Financial Year. Operationally, profitability improved over the last few months of the reporting period.
Our Net Cash Flow from Operating Activities reached a positive RMB 7 million. Our Balance Sheet is healthy with Shareholders' Equity of RMB 142 million (equivalent to about EUR 15.6 million or EUR 1.60 per share). The cash position increased drastically from RMB 4.9 million to RMB 54.5 million. Main reason was a loan granted for Research and Development purposes of RMB 30 million. But also the fact that we imposed tighter payment terms on our clients, and also improved the efficiency of our logistics and production cycle allowed us to reduce working capital needs and free up cash, in spite of a substantial increase in sales. All balance sheet ratios (liquidity, indebtedness) are very comfortable. The full annual report will be published on our website www.gongyoumachines.com over the next few days. Dong Yanwei Chairman End of Corporate News 11.10.2010 Dissemination of a Corporate News, transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de |
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