- Comprehensive Service Offering Drives Business Growth
- Net Profit Surges 65.4% to HK$33.0 million
Hong Kong, Aug 28, 2014 - (ACN Newswire) - On Time Logistics Holdings Limited ("On Time" or the "Group"; stock code: 6123), an international freight forwarding and logistics service provider, today announced its unaudited consolidated interim results for the six months ended 30 June 2014. This is the first interim results of the Group since its successful listing on the Main Board of The Stock Exchange of Hong Kong Limited on 11 July 2014.
-- Revenue increased by 18.6% to HK$1,691.1 million (1H2013: HK$1,425.9 million)
-- Air freight business achieved a growth of 37.4% in segment profit to HK$126.8 million (1H2013: HK$92.3 million)
-- Net profit attributable to owners of the Company surged 65.4% to HK$33.0 million (1H2013: HK$20.0 million)
During the period, supported by the solid performance of the air freight business, the Group recorded revenue of HK$1,691.1 million (1H2013: HK$1,425.9 million), representing a period-on-period rise of 18.6%. Gross profit rose by 20.7% to HK$255.8 million (1H2013: HK$212.0 million). Gross profit margin stood at 15.1% (1H2013:14.9%), while net profit attributable to owners of the Company rose significantly by 65.4% from HK$20.0 million in the corresponding period last year to HK$33.0 million. The surge in net profit was mainly due to the general increase in demand from customers, in particular brought by the air freight segment as one of the customers has substantially increased its volume of shipments during the period.
Mr. Spencer Lam, Chairman and Chief Executive Officer and Executive Director of On Time, said, "We are pleased to announce the satisfactory performance during the first half of 2014. During the period, the demand for logistics and freight forwarding services continued to rise. With our comprehensive service offering, we are able to meet diverse customer's needs. Apart from continuing to strengthen our core business performance by expanding our global presence to meet continuous increase in market demand, we have also devoted greater efforts to explore e-commerce opportunities and improve IT capability, so as to tap the market opportunities."
The air freight forwarding business constituted the largest business segment, representing 69.7% of the Group's total revenue. Leveraging its strong relationship with customers and strong links with major airlines, the air freight business recorded revenue of HK$1,177.9 million (1H2013: HK$928.9 million), representing a significant rise of approximately 26.8% over the corresponding period of 2013. Gross profit of the segment also improved from HK$123.6 million to HK$160.3 million, up 29.7% period-on-period. In respect of air import and export tonnage, the Group achieved exceptional period-on-period growth of 9.2 % and 17.6% respectively, the result of its established market position and extensive network coverage that includes 54 offices around the world as at 30 June 2014, 44 offices of which are located in 13 Asian countries and territories.
The ocean freight forwarding business contributes 26.7% of the Group's total revenue. During the period, despite stiff headwinds experienced in the market and slower consumer demand, the segment still managed to achieve revenue growth of 2.6% period-on-period to HK$452.2 million (1H2013: HK$440.9 million). However, owing to rising costs, gross profit slipped slightly to HK$72.3 million (1H2013: HK$74.8 million). Depending on market conditions, the Group sought to transfer such costs to its customers so as to reduce the cost burden and improve the segment's performance.
General Sales Agency Business
Despite the termination of one airline appointment, the general sales agency ("GSA") business managed to perform at a comparable level as the corresponding period of 2013, with revenue of HK$1.4 million (1H2013: HK$1.5 million). The revenue generated from GSA recorded as net agency income, therefore gross profit margin of the segment maintained at 100%.
Ancillary and Contract Logistics Services
During the first half of 2014, the Group sought to further adjust its warehouse operation to cope with market conditions. Consequently, the business achieved revenue of HK$19.8 million (1H2013: HK$27.4 million) and gross profit of HK$11.0 million (1H2013: HK$11.2 million).
The other businesses include combined shipment, trucking and hand-carry services, the latter of which involves time sensitive shipments that allow the Group to charge higher fees and consequently benefit from higher profits. During the period, the segment recorded revenue of HK$39.8 million (1H2013: HK$27.1 million) and gross profit of HK$10.7 million (1H2013: HK$0.9 million).
Looking ahead, the global demand for logistics and freight forwarding services is expected to remain healthy in the medium to long term. In view of the favourable trend, On Time has formulated specific measures in different aspects to pave for future development.
Strengthen Global Presence and Expand Office Network
To capitalise on growing demand, On Time will employ an aggressive market expansion strategy in Asia and the Middle East. This will allow the Group to specifically meet increasing cross-border logistics service demand, and in turn capture greater market share and trade volume. In respect of market expansion in North America, this will be facilitated by generating greater network synergies through strategic acquisitions.
Enhance Core Businesses with Growth Potential
Aside from enhancing its market exposure, On Time will look to bolster its core businesses including air and ocean freight operations. The contract logistics services business will also be advanced by means of broadening its range of services, which will be supported by improved customer supply chain management and implementation of a comprehensive warehouse management system.
Explore E-commerce Opportunities and Bolster IT Capability
As one of the important focus areas of the Group going forward, On Time will continue to explore e-commerce opportunities, such as the possibility of encouraging the cross-selling of goods among its existing direct customers. Such customers would also be provided with sales opportunities that enable them to tap into new markets, gain new business and attract new customers while relying on the Group's air freight operation, warehousing and distribution capabilities and IT infrastructure, thus delivering benefits to all parties concerned. To expedite development of the e-commerce business, a dedicated team will be established within the second half of 2014, and will possess experience in e-commerce marketing, relevant technical expertise and the capacity to identify products with good online sales potential.
Mr. Lam concluded, "In order to take advantage of the favorable market environment, we will strive to further enhance our core business through market expansion and IT capability enhancement as well as e-commerce opportunities exploration. With greater financial resources on hand, an increasingly robust business model and healthy outlook for the logistics and freight forwarding industry, the management is optimistic about On Time's ability to sustain growth and deliver fair returns to our shareholders."
About On Time Logistics Holdings Limited
Established in 1995 in Hong Kong, On Time is a growing international freight forwarding and logistics service provider. As at 30 June 2014, it has a global network with 54 offices in 16 countries across Asia, the Netherlands and North America serving multinational customers with cross-border logistics requirements covering various industries including garments, footwear and electronics. As an IT-driven logistics provider and with a broad customer base comprising the retail sector, the Group is well positioned to explore business opportunities in e-commerce.
Source: On Time Logistics Holdings Limited
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