Gongyou Machines Ltd.
Gongyou Machines Ltd.: Losses in Financial Year 2009
Gongyou Machines Ltd. / Final Results 05.11.2009 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. --------------------------------------------------------------------------- The recession has affected the global machine tool industry even more than most other industries. Therefore, during Jan-June 2009, the industry developed even worse than in the first half. In line with this trend, Gongyou's exports dropped dramatically in 2008 and remained on a low level in 2009. Domestic sales, mainly to Chinese furniture manufacturers, initially declined, because Chinese furniture exports to the USA fell strongly, but started to recover beginning in the April-June 2009 quarter.In RMB million FY 2009 FY 2008 change (decline in %) Revenue 120.0 179.6 (33%) Gross Profit 11,7 34,6 (66%) (Loss) / Profit Pre-Tax (14,1) 15,0 (Loss) / Profit After Tax (14,0) 13,3During the first half of the reporting period, high raw material costs during the early months of the reporting period, based on purchases made in summer 2008, led to a strong decline in gross margin. Higher distribution expenses, necessary to incentivize domestic distributors, led to an overall increase in expenses. In the second half of FY 2009, Jan-June 2009, the demand situation remained difficult. We noticed a slight improvement in the domestic market towards the end of the reporting period. Only in case of an economic recovery in principal export markets, such as Russia, ASEAN and Latin America, a normalization of our exports can be expected. We begin to feel a higher interest among buyers, but it has not materialized in a strong order situation yet. We expect further improvements in the domestic market in China. While demand is increasing, competition is strong and margins are not high enough to compensate for the difficult export situation. Due to our strong balance sheet, Gongyou's operations and stability are not endangered by the losses during the reporting period. Gongyou has the reserves to withstand the actual strong cyclical downturn. Shareholders' equity at 30.06.2009 was RMB 143.5 million. Please download the complete audited report here: http://www.gongyoumachines.com/news/upload/xiaotu/200993075929744.pdf Xavier Hou Gongyou Machines Ltd. No.689 Qingdao South Road Weihai City, Shandong Province, People's Republic of China Postal Code: 264200 Telephone: (86) 631 5366696 Fax: (86) 631 5364880 E-Mail: export@gongyou.com 05.11.2009 Financial News distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de ---------------------------------------------------------------------------
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