Midas FY16 profit up 76.3% driven by newly acquired aluminium plates and coil division

Midas Holdings Limited, the leading manufacturer of aluminium alloy extruded products for the passenger rail transportation sector in China has reported a 76.3 per cent YOY rise in profit after tax for 2016 to 100.8 million yuan (US$20.5 million).

The profit was primarily driven by the aluminium stretched plates division following its acquisition in July 2016 and also by a rise in other income by 72.2% per cent to 40.9 million yuan supported by government subsidies. Other than that, income was boosted by other interests and sale of scrap from the aluminium alloy extruded products division.

The total revenue in FY16 dropped 1.8 per cent to 1.49 billion yuan, attributed to lower revenue realization from group's core aluminium alloy extruded products division, which makes up 87 per cent of FY16 revenue. Gross profit margin increased from 26.9 per cent in FY15 to 29.7 per cent in FY16, supported by higher gross profit margin in the aluminium alloy extruded products division.

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The company statement says that China's railway expansion plans have opened up significant infrastructure and construction opportunities for the domestic companies.

"Besides capitalising on opportunities in the railway industry, the group remains on track with its strategy to expand its customer base to enter new industries and sectors. With the acquisition of Huicheng Capital on July 27, 2016, the group has expanded its range of products and services to include aluminium alloy stretched plates and hot-rolled aluminium alloy plates and coils. The group aims to further expand its operational capabilities in a similar direction for the coming years," the earning statement concludes.