YHI International posts record net profit

Singaporean tyre, wheel and battery distributor and manufacturer, YHI International posted record net profits of S$41.1 million in 2011, though profit margin dwindled a percentage point on lower margins in its manufacturing business segment. The company distributes Yokohama, Nexen and Nankang tyres and Enkei, OZ and Konig wheels, among other brands, across south-east Asia. Executive chairman and Group managing director, Richard Tay said “despite the global economic uncertainties and strong competition, we have achieved excellent financial results… We are on track in executing our five-year business expansion plan (FY2011-FY2015) to grow our manufacturing and distribution businesses, and strengthen our multi-brand, multi-category and multi-product sales initiatives for all YHI’s sales offices and appointed distributors worldwide.”

YHI announced a record turnover of S$550.6 million for the financial year ended 31 December 2011. Its revenue climbed 10 per cent from S$499.6 million to S$550.6 million and its net profit attributable to shareholders (PATMI) increased 16 per cent from S$33.0 million to S$38.2 million. In tandem with the increase in profits, earnings per share for the full year went up by 16 per cent from 5.64 Singapore cents to 6.53 Singapore cents. These increases were mainly due to higher demand for our products.

“Our results demonstrate that we are on the right direction for growth,” said Tay, “and our strategy, hard work and dedication have paid off well. Our record performance spurs us to improve our services and product offerings in order to meet our customers’ demands more effectively.”

Both YHI’s distribution and manufacturing segments recorded higher turnover; distribution contributed 71 per cent of its total turnover, recording a 10 per cent rise in revenue to S$389.3 million. The manufacturing segment accounted for 29 per cent of the Group’s total turnover and recorded a growth of 11 per cent in revenue to S$161.3 million.
Gross profit rose by 6 per cent due to higher turnover and better margins in the distribution segment, and higher turnover in the manufacturing business segment. The Group’s gross profit margin decreased slightly to 24 per cent from the previous 25 per cent due to lower margins in the manufacturing business segment.

The Group made disposal gains of S$8.0 million in its 10 per cent investment in Hangzhou Yokohama Tire Co., Ltd; and 49 per cent investment in Associated Company Yokohama Tire Sales (Shanghai) Co., Ltd in July 2011. In line with the increase in business activities, operating expenses increased. Distribution expenses increased by 8 per cent to S$41.9 million, mainly due to higher sales related expenses and higher staff costs in tandem with higher turnover.

Outlook uncertain in 2012

Looking to 2012 YHI said sovereign debts crises and recession woes in Europe, coupled with the softening economy in China meant the global economy to fraught with uncertainties in 2012. In addition, crude oil, aluminum prices, and currency volatility will continue in 2012. YHI intends to continue its efforts on brand building, cost improvement initiatives, capacity utilisation, productivity increases and operating efficiency.

Tay added: “We will continue to develop business opportunities where appropriate and monitor our business operations closely. We remain positive about our business prospects due to the high demand for our products and we are on track in following through effectively on our five-year business plan”.

Related news:

• Yokohama acquires YHI share in Chinese JVs
• YHI – Now is the ‘right time’ for greater OEM sector involvement