IDT International profit up 7% to HK$262.9mln

Improvements are being made to uplift production efficiency and lower the costs of production to enhance the profit margins.

Consumer electronic products manufacturer and brand distributor IDT International Limited (“IDT International”) has announced its interim results for the six months ended 30 September 2010.

For the period under review, the Group recorded a total turnover of HK$814.4 million, a rise of 17% over the HK$695.0 million achieved in the same period last year. The increased turnover was attributable both to a recovery in the retail markets of America, Europe and to new products that were launched during the period.

Gross profit was HK$262.9 million, a growth of 7% compared to HK$245.4 million in the same period last year. Implementing the “turn aging inventory into cash programme”, the prices of specified slow moving items were lowered during the review period, thereby reducing this inventory. Overall gross margin was 32%.

For the period under review, the Group managed to decrease the loss attributable to the owners of the Company to HK$1.8 million, a significant improvement over the attributable loss of HK$26.4 million recorded last year, according to an IDT International report.

During the period, IDT maintained its healthy cash position. As at 30 September 2010, the cash and bank balances of the group, including short term bank deposits, were HK$610.7 million.

Dr Raymond Chan, Chairman of IDT International, said, “The global recession affected business in consumer sectors in 2009, while the current year has seen a gradual global economic recovery, which has improved business for consumer products companies. The Group has continued to maintain a stable financial position and is confident that the business growth will be maintained. We will carry on with restructuring our business model and operations, and aim to increase sales whilst improving our business and operational effectiveness and efficiency.”

Oregon Scientific
Sales from the Oregon Scientific brand were HK$407.3 million, a rise of 11% compared to HK$366.2 million last year. The sales achieved were 50% of the Group’s total sales in the current year. Oregon Scientific should continue to benefit from the economic recovery, as is reflected in the current increase of retail sales.

Sports and Outdoor, Health and Wellness are some of the future key product categories planned for the Oregon Scientific brand. A full range of new beauty products in our collection of massagers and aroma diffusers have been introduced in the Health and Wellness line. The successful launch of these new products has been confirmed through sales in prominent chain stores and TV shopping channels. A new range of Heart Rate Monitors, Pedometers and watch products with improved features and designs, targeted especially at female consumers, is about to be launched. Market focus will be placed on the Asia Pacific region, especially in China.

By product segment, LCD Consumer Electronic Products, Electronic Learning Products and Telecommunication and Other Products accounted for 48%, 27% and 25% respectively during the period under review.

LCD Consumer Electronic Products
Sales of this product segment rose by 15% to HK$389.6 million. The increase in sales was mainly the result of higher sales of Oregon Scientific branded products, up 7% to HK$144.8 million, whilst ODM/OEM sales were HK$244.8 million, a 21% rise compared to last year.

To increase its competitiveness, the Group continues to develop and design higher-end innovative products, incorporating new technologies. Close collaboration with technology partners and ongoing investment in research and development are strategies implemented to improve the competitiveness of new products.

Electronic Learning Products
Sales amounted to HK$223.3 million, down 5% compared with last year.

In the operations side, the Group continued to strengthen the outsourcing strategy, whilst at the same time streamlining the small factory operations, to improve the overall operational efficiency.

Telecommunication and Other Products
Sales have surged by 64% to HK$201.5 million compared to the same period last year. The business has recovered well and is on track to continue with orders from customers being stable and the outlook is also encouraging.
The demand for our conference phone is promising and shipment quantities have doubled.

Moreover, the demand for the “military” radio continues to increase. During the first half, the new ‘action camera’ product (ATC9K) was launched and won the “Innovation 2010, Design and Engineering Award”, which is a high level testimony to the Group’s innovative efforts and market leadership in this segment.

Overall, continuous improvements are being made to uplift production efficiency and lowering the costs of production, to continue to enhance the profit margins.

Dr. Chan concluded, “The global economy continues to improve particularly in those economies within the Asia region, as various global economic stimulus measures gradually take effect. The overall economic environment undeniably has improved. The Group continues to maintain a stable financial position and is confident that the business will now continue its growth. With the strategic measures of the management, coupled with our strong cash position, we believe that we are on a solid growth track, and will deliver a better performance than last year.”