Thakral's net profit falls 18% to $18.5m

By Bryan Lee - 20 May 2005
The Straits Times

CONSUMER electronics distributor Thakral Corp reported yesterday an 18 per cent fall in full-year net profit to $18.5 million.

Despite revenues inching up 1 per cent to $535.3 million for the year ended March 31, the Hong Kong-based company's bottom line was hit by higher operating expenses and lower earnings from a property development unit in China.

Thakral said the unit, Wujiang Dafa, saw gross profit plunge to $300,000 from earnings of $3.3 million last year.

In its mainstay business of trading and distribution, profits fell as the company incurred higher marketing costs from handling new brands and promoting its own in-house brand.

However, managing director Inderbethal Singh Thakralsaid: 'While we have increased our expenses to enhance our marketing and brand-building activities, we have gained tremendously from our stronger market position and branding expertise.'

Thakral also gained $2.7 million from the partial sale of its stake in Gateway Distriparks in India.
The company said it will continue to look to China for growth. It will move its headquarters to Shanghai this year and expand its mainland retailer network over the next three to four years.

'We will leverage on the immense growth opportunities in China, in view of the impending reduction of import duties,' said Mr Thakral, referring to the country's upcoming entry into the World Trade Organisation.

The company reported a stronger balance sheet as well. Its cash balance improved to $61.3 million from $42.1 million, boosted by a net gain of $30.9 million from a private share placement.

Earnings per share were 1.23 cents, down from 1.51 cents last year. Net asset value per share was 11.46 cents, up from 11.23 cents a year earlier.

A dividend of 0.6 cent per share was recommended.