GRAND POWER LOGISTICS REPORTS FINANCIAL RESULTS FOR Q2 2010
Generates higher revenue, reduces expenses and produces a profit of more than $300,000
CALGARY and HONG KONG, Aug. 24 /CNW/ - Grand Power Logistics Group Inc. (TSXV: GPW), a leading international logistics provider based in Hong Kong and with operations in China, today announced its consolidated financial results for the three- and six-month periods ended June 30, 2010. All amounts are expressed in American currency(1).
Selected Q2 Financial Highlights
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(in thousands except June 30, June 30,
share or % data) 2010 2009 Change
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Revenue $21,345 $20,392 +4.7%
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Gross profits $1,911 $1,567 +22.0%
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Gross margins 9.0% 7.7% +1.3%
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Net (loss) income $308 $(547) +$855
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Earnings (loss) per share $0.006 $(0.01) +$0.02
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June 30, Dec 31,
2010 2009 Change
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Total assets $29,489 $37,175 -20.7%
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Working capital $8,063 $9,927 -18.8%
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Total liabilities $18,836 $27,717 -32.0%
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Shareholders' Equity $10,360 $8,896 +16.5%
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"We are very pleased with our second quarter results," said Mr. Ricky Chiu, President and CEO of Grand Power Logistics Group. "We made significant progress across each of our financial metrics on a year-over-year basis, including generating higher revenue by almost 5% and lowering our operating expenses by 21%. Most importantly, we generated a profit of more than $300,000. This momentum is very encouraging and paves the way for the second-half of the year, which historically is the strongest period of our operations given that exports from China are usually at their highest during this time of the year."
Q2 2010 Financial Operational Highlights
- Adopted the US dollar as the Company's reporting currency since the
majority of the Company's transactions are conducted in Hong Kong
currency, which is pegged to the US dollar. The change will reduce
the effect of Canadian/US exchange rate fluctuations on financial
results going forward.
- Implemented new selling rates in response to increased market demand
following interruptions to airline service due to volcanic activity
in Iceland.
- Shipped 9,173 tons of cargo, down 19% as a result of a concerted
strategy to increase direct sales and reduce co-loading activities.
- Gross profit per ton shipped increased by 195% to $208 per ton, up
from $70 as a result of direct sales strategy and increased
concentration of higher margin sales opportunities.
Q2 2010 Financial Results
Grand Power Logistics reported consolidated revenue of $21.3 million for Q2 2010, up 4.7% or $0.9 million on a comparative basis from $20.4 million for Q2 2009. On a sequential basis, revenue for Q2 2010 increased 43.4% or $6.5 million over Q1 2010. The growth was principally due to the recovery of the global economy, and, in particular, increased exports from China to the U.S. and European markets.
On a six-month basis, revenue for 2010 was $36.2 million, down from $40.8 million for 2009.
Gross profit and gross margins were $1.9 million and 9.0%, respectively, for Q2 2010. These compare to $1.6 million and 7.7%, respectively, for the corresponding period of 2009. On a sequential basis, gross profits and gross margins for Q1 2010 were $1 million and 6.7%, respectively. The improvement was largely due to the implementation of new customer pricing and increased market demand.
On a six-month basis, gross profit and gross profit margins for 2010 were $2.9 million and 8.0%, respectively. These compare to $3.6 million and 8.8%, respectively, for 2009. The year-over-year decline was principally due to rate increases levied by air carriers in Q1 2010 as part of general industry-wide trend. The timing of the air carrier rate increases, coupled with the terms of existing customer contracts, made it impossible to offset the increased cost of sales with higher customer fees.
Operating expenses for Q2 2010 were $1.7 million, down 21% from $2.1 million for the corresponding period of 2009. The decline, which was most notable by the decrease in general and administrative expenses of 29.7%, was due to the Company's restructuring program implemented in 2009 and ongoing cost-cutting measures. On a sequential basis, operating expenses for Q1 2010 were $1.6 million. The growth on a sequential basis in expenses of 7.5% was principally due to foreign exchange fluctuations.
Operating expenses for the six-month period of 2010 were $3.2 million, down from $4.2 million for 2009. The decline in expenses was chiefly attributable to the Company's restructuring program and ongoing cost-cutting measures.
Net income for Q2 2010 was $307,859, or $0.006 per fully diluted share, representing a positive turnaround of approximately $0.9 million when compared to a net loss of $547,379, or $0.01 per fully diluted share, for Q2 2009. Net income for Q2 2010 included a recovery of 30%, or $321,995, of the share of costs attributable to minority shareholders affiliated with the Company's subsidiary, Grand Power Logistics Development Co (GPLD), for the development of the Yangshan International Container Transit Logistics Park. On a sequential basis, net income for Q2 2010 represented a positive turnaround of more than $0.9 million when compared to the net loss of $632,899, or $0.01 per fully diluted share, for Q1 2010.
On a six-month basis, the Company reported a net loss of $325,041, or $0.007 per share fully diluted share, for 2010 and a net loss of $538,319, or $0.01 per fully diluted share, for the corresponding period of 2009. The decrease in net loss is attributable to a number of factors, including increased market demand, higher margin sales and reduced operating expenses.
As at June 30, 2010, Grand Power had working capital of $8.1 million, including cash totaling $5.9 million. This compares to $9.9 million and $6.1 million, respectively, at December 31, 2009. At June 30, the Company's liabilities totaled $18.8 million, down from $27.7 million at year-end 2009.
Outlook
"Based on the positive impact of our restructuring program and our increased focused on higher margin business opportunities, we are well on our way to completing a turnaround for our company given our recent performance," added Mr. Chiu. "With the promising start to Q3, we expect continued growth for the balance of the year. Over a longer horizon, the progress we are making with our project to develop the Yangshan International Container Transit Logistics Park, as well as with our joint venture initiatives, provides the potential for significant long-term growth."
Conference call notice
Grand Power will host a conference call on August 25, 2010 at 10:00 a.m. EST to discuss its first quarter results.
To access the conference call by telephone, dial 1 (888) 231-8191 or (647) 427-7450. Please connect approximately 15 minutes prior to the beginning of the call to ensure participation. A question and answer session for analysts and institutional investors will follow management's presentation.
A live audio webcast of the conference call will be available at www.newswire.ca. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above web site for 30 days.
About Grand Power Logistics Group Inc.
Grand Power Logistics Group Inc. operates principally through its wholly owned Hong Kong based subsidiary, Grand Power Express International Limited (GP Express) and provides air-freight forwarding and sea-freight services, customs brokerage, logistics, warehousing and distribution, as well as other value added services. GP Express has established operations in various regions, particularly in the Greater Pearl River Delta (GPRD), China's largest economic region. GP Express' Subsidiaries or Branch Offices in this region are located in Macau, Shenzhen, Guangzhou and Jiangmen. GP Express also operates in other regions through Subsidiaries and Branch Offices or Supporting Offices in Shanghai, Taipei, Bangkok and Los Angeles. For more information visit www.grandpowerlogistics.com.
Forward-looking Information
Statements included in this press release that are not historical facts may be considered "forward looking statements". All estimates and statements that describe the Company's objectives, goals or future plans are forward looking statements. Forward-looking statements involve inherent risks and uncertainties where actual results could differ materially from those currently anticipated.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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(1) Effective April 1, Grand Power adopted the US dollar as its reporting
currency. In accordance with Canadian generally accepted accounting
principles (GAAP), all prior year comparative asset and liability
balances were translated at historical exchange rates, and income
statement balances were translated at the average exchange rate for
the respective period.
For further information: Grand Power: Alan Chan, CFO, 403 237 8211, [email protected]; Equicom: Joe Racanelli, 416 815 0700 ext. 243, [email protected]
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