By HANNAH OOI
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CHINA Eratat Sports Fashion, which was listed on the Singapore Exchange's mainboard last April, is taking a prudent approach to expansion plans even as it reported a surge in revenue and earnings.
The footwear and sports apparel company yesterday announced a more than doubling in net profit to 40.2 million yuan (S$8.8 million) for the third quarter ended Dec 31, 2008, from 19.2 million yuan for the previous corresponding period. This helped raise net profit for nine months by 92.8 per cent to 100.9 million yuan.
The higher earnings came as Q3 revenue surged 87.9 per cent to 227.6 million yuan, resulting in nine-month revenue rising 92.1 per cent to 610.2 million yuan. Strong sales came from both its footwear and apparel segments.
Other contributing factors included lesser footwear being outsourced to third party manufacturers and the commencement of more footwear production lines. Earnings per share for the nine months rose 37.2 per cent to 24.74 fen.
In response to China's economic slowdown, China Eratat has deferred plans on opening new production lines - currently using six instead of the initially proposed 10.
A prudent approach to expansion plans was emphasised by president and CEO Lin Jian Cheng, who also underscored significant product differentiation from other sports brands. 'Since we've been in the industry for some time, we have faced many downturns before and have survived,' he said.
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