Midas Holdings posts 59.8% fall in 3Q net profit to $5.6m

Midas Holdings says profit attributable to equity holders in the three months ended September 30, 2011 (3Q2011) fell 59.8% to RMB 27.4 million ($5.6 million) from RMB 68 million in 3Q2010.

Group revenue rose 4.6% to RMB259.3 million in 3Q2011 from RMB248.0 million in 3Q2010.

The group’s Aluminium Alloy Division recorded a 5.0% increase in its 3Q2011 revenue to RMB248.3 million, which accounted for 95.8% of total revenue.

The Transport Industry remains the largest revenue contributor to the group’s Aluminium Alloy Division, accounting for 80.5% of the division’s revenue in 3Q2011. The “Others” segment, which included mainly the supply of aluminium alloy rods and other specialized profiles for industrial machinery, contributed 19.3% of revenue to the Aluminium Alloy Division. Revenue contribution from the Power Industry accounted for the remaining 0.2% of revenue.

The group’s share of loss from its associated company Nanjing SR Puzhen Rail Transport Co. amounted to RMB3.6 million in 3Q2011. This was largely due to fewer train cars delivered to its customers during the period under review.

In 2011, China’s railway industry has been affected by several incidents. These incidents have dampened the near-term outlook of China’s railway industry and affected the group’s operating environment. Revenue generated from China’s railway industry contributes 70 to 80% of the group’s total revenue. Therefore, the group is affected by macro factors and government policies, such as changes in the Chinese government infrastructure spending and personnel changes, which are beyond its control.