Chairman's Message
* Extracted from Annual Report 2008
Dear Shareholders,
In 2008, Midas Holdings continued our exciting journey of growth.
During the year, we strengthened our foothold in the PRC's rail
transportation market by securing more contracts. Despite a
challenging operating environment in the second half of the
year brought about by the global financial crisis, I am pleased to
report that we achieved stable growth for the full year and made
strategic moves that strengthened our fundamentals.
In 2008, our profit before tax increased by 15.3% to S$40.7 million. However, changes in the tax rates in the PRC impacted our net profit which increased marginally by 2.4% to S$32.7 million. Our revenue increased by 2.9% to S$144.5 million. Revenue growth was mainly driven by strong sales at our Aluminium Alloy Division, or Jilin Midas Aluminium Industries Co., Ltd ("Jilin Midas") (吉林麦达斯铝业有限公司), our core business unit.
In view of the boom in the PRC's rail infrastructure industry, we have been increasingly shifting our business focus to concentrate on our aluminium alloy business. As a PRC certified supplier to the world's largest train manufacturers, ALSTOM SA, Siemens and Changchun Bombardier, I am proud to note that we are currently the major player in the PRC rail transportation market in supplying aluminium alloy extrusion profiles for train car bodies.
In 2008, Jilin Midas secured six new contracts to supply aluminium extrusion profiles for train cars in the PRC and international markets, adding to our order book to be delivered in 2009 and 2010. Four contracts were awarded for local PRC projects, namely:
- Shanghai Metro Lines 6 and 8 Projects
- Shanghai Metro Line 10 Project
- Shanghai Metro Line 11 Project
- Guangzhou Metro Lines 2 and 8 Projects
Two other international projects were awarded, namely:
- RS-Citadis Project in Europe; and
- Incheon International Airport Railroad Project in South Korea
Besides Jilin Midas, our associate company, Nanjing SR Puzhen Rail Transport Co., Ltd (南京南车浦镇城轨车辆有限公司) ("NPRT"), also made progress in growing its market presence in 2008. During the year, NPRT, together with its consortium partners, clinched three new contracts, namely:
- Nanjing Metro Line 1 Extension Project
- Nanjing Metro Line 2 Phase 1 Project
- Shanghai Metro Line 2 Eastern Extension Project
NPRT contributed a profit of S$1.9 million in 2008 to our Group's bottomline in its second year of operations.
Going forward, the operating environment in 2009 is likely to be challenging given the uncertain global economic situation. Despite this, we are fortunate that the outlook for the rail infrastructure sector in the PRC remains positive.
In response to the global economic recession, the PRC government has announced expansionary fiscal measures to stimulate the domestic economy. With its abundant reserves, the government put together a RMB4 trillion fiscal stimulus package to boost domestic investment and demand. Given that rapid urbanisation and economic advancement across the PRC has led to the urgent need for new and upgraded railway and metro lines, the government has allocated a massive budget for investments in rail infrastructure. The Ministry of Railway has pledged to make improvements to railway and metro transportation networks in many cities in the PRC. In return, these developments are likely to boost demand for rail infrastructural-related products in the PRC, including our aluminium alloy profiles. As such, we are excited about the opportunities that lie ahead and are confident that we can seize them to propel the Group to greater heights.
On behalf of the Board of Directors, I would like to express my appreciation to our loyal shareholders, business partners and employees of Midas. Thank you for being on board with us while we embark on this exciting journey. Together, we will work towards creating and enhancing value to all who have contributed to our growth!