Rechargeable battery manufacturer Hong Kong Highpower improves profitability
Nickel-metal hydride and lithium ion battery manufacturer Hong Kong Highpower Technology (NASDAQ:HPJ) managed to report improved net income in 2009 despite a 6% decrease in revenues, thanks to much stronger margins.
The New York listed, China based manufacturer of rechargeable
batteries for electronic devices generated total revenues of US$70.3
million in the 12 month period ended 31 December 2009 (“FY 2009”), down
from $75 million in 2008, which was blamed on lower average selling
prices.
However, despite the lower revenues, net income rose 122% to $4.4 million or 33 cents per share (2008: net income $2 million or 15 cents) thanks to improved efficiencies from its manufacturing facilities and higher volumes which helped drive down the average cost per unit.
Gross profit in 2009 increased 18% to $15 million (2008: $12.8
million) as gross margin margins improved by 4% to 21%. Selling and
distribution costs remained unchanged at $2.4 million in 2009, while
General and administrative (G&A) expenses rose by 1% to 9.1% of net
sales.
"We more than doubled our net income in 2009 and significantly
increased our gross profit and margins in the face of a still fragile
economy. Our focus on cost containment efforts and execution proved
invaluable in helping us weather the most severe economic crisis in
recent history,” commented George Pan, Chairman and CEO of Hong Kong
Highpower Technology.
The NASDAQ listed company ended the year with cash and cash
equivalents and restricted cash of $8.4 million and total assets of $51
million. Bank credit facilities totaled $27 million at the end of 2009,
with approximately $12million available.
Hong Kong Highpower Technology also reported fourth quarter
results today (“Q4”). Net sales for Q4 hit $22.5 million up 27% in Q4
2008, due to an increased demand from customers. Q4 gross profit
increased 37% to $4.3 million (Q4 2008: $3.2 million), while gross
margins improved by 1% to 19%. Net income in the fourth quarter more
than doubled to $0.64 million, or 5 cents per diluted share.
"As we look forward, we believe we are well positioned within our
industry to capitalize on growth opportunities with well over 10% share
of the global Ni-MH battery market and excellent and stable customer
relationships,” Pan added.
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