Pacific Textiles (1382) H1 24/25 earnings summary

Executive summary

• Revenue increased by 16.2% year-over-year to HK$2,667.2 million, driven by a 21.9% rise in sales volume despite a 4.7% decrease in average sales price.

• Net profit attributable to equity holders declined by 14.1% to HK$106.9 million due to losses at the new Vietnam Nam Dinh Plant, typhoon-related disruptions, and reduced exchange gains.

• China Nansha Plant showed strong performance with sales volume up 28.3% and revenue up 20.6% year-over-year, driven by new customer acquisition and product innovation.

• Gross profit margin declined to 7.5% from 9.3% year-over-year, reflecting higher costs and operational challenges.

• Interim dividend of HK$0.07 per share declared, unchanged from last year.

Financial highlights

• EBITDA was HK$251.0 million, with an EBITDA margin of 9.4% (down from 11.1%).

• Net profit margin decreased to 4.0% from 5.4% year-over-year.

• Operating profit was HK$130.2 million, down from HK$165.1 million year-over-year.

• Earnings per share were HK$0.08, compared to HK$0.09 in the prior year.

• Operating cash inflow was HK$98.3 million, down from HK$269.9 million year-over-year.

Outlook and guidance

• Vietnam Nam Dinh Plant entered bulk production in September 2024, with expected productivity increases in the second half.

• Typhoon Yagi caused temporary production suspension at Vietnam Hai Duong Plant; production has resumed to 70% of pre-incident levels, with full recovery expected over several months.

• Management expects improved profitability in the second half of FY2024/25, focusing on diversification, R&D, cost control, and flexible resource allocation.

• Full-year impact of Typhoon Yagi and related insurance claims still under assessment.