Sino Grandness Returns to Profitability for Q2 2022 Despite Higher Finance Costs; Half-Year Net Loss Narrows Sharply
Summary:
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Revenue surged 37.5% to RMB738.9 million for the half year ended 30 June 2022 (HY2022), driven by increased domestic sales of beverages and canned products as markets recovered post-COVID.
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Gross profit jumped nearly threefold to RMB238.2 million, with gross margin improving from 15% to 32%, helped by higher productivity and demand.
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Q2 net profit of RMB18.6 million, reversing a loss in the prior year quarter. However, for HY2022, the group still posted a small net loss of RMB5 million, dramatically narrowing from a RMB165 million loss in HY2021.
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Selling & distribution costs dropped by 57.5%, largely due to reduced TV advertising compared to last year.
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Administrative expenses fell 22%, aided by restructuring and settlement of previous foreign currency loans.
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Finance costs nearly doubled to RMB90.1 million due to accrued interest on bonds and shareholder loans.
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Cash from operations rose to RMB292 million, supporting an increase in cash balance to RMB375 million.
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Property, plant and equipment rose to RMB2.2 billion, reflecting investments in new production facilities.
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The company remains focused on expanding its domestic and export market share, investing in manufacturing and branding despite global macro risks.
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No interim dividend was declared to conserve cash.
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Updates provided on the ongoing discussions with Goldman Sachs over a letter of demand and with Soleado Holdings on overdue loans.