GP Batteries's turnover for the three months ended 31 March 2007 was S$205.7 million (US$ 134.3 million), an increase of 3.5% over the corresponding period last year. The profit after tax attributable to equity holders of the Company for the fourth quarter rose to S$4.1 million (US$ 2.7 million), compared to S$2.8 million for the corresponding quarter last year. For the year ended 31 March 2007, the Group’s turnover was S$819.7 million (US$ 535.3 million) , a decrease of 7.5% over the previous year. The profit after tax attributable to equity holders of the Company decreased by 10.8% to S$12.1 million (US$ 7.9 million).
Turnover for most of the products remained steady except for Nickel Metal Hydride (NiMH) and Lithium Ion rechargeable batteries, which registered a decrease of about 21% and 30% respectively. However, sales of primary cylindrical batteries increased by about 6%. The sales spread across different regions was stable with little fluctuations. Gross profit margin decreased due to the surge in raw material prices especially Nickel, Zinc but this was mitigated by our forward hedging policy. The persistently record high Nickel prices had triggered a significant market consolidation. Many competitors had either scaled-down production or exited from the industry entirely and this has made further price increases possible.
The Group’s subsidiary, Ningbo GP Energy Co., Ltd which was partially destroyed by fire in 2005 will resume operation in fiscal year 2007/2008. Danionics Asia Limited, the Lithium Polymer joint venture with our Danish partner has progressed slower than expected because of delays caused by the restructuring of its major potential customer. The joint venture with Vectrix Corporation for the production of electric vehicle NiMH battery packs is progressing. In view of the high nickel cost, the Joint Venture will explore another chemistry system to power the electric motor cycles. The One Laptop Per Child program is in progress but the cost of NiMH battery system was affected by the high raw material prices. The Group is currently exploring alternate battery systems with the principal.The initial launch to selective markets of the GP ReCyko batteries, a new breed of rechargeable batteries with low self discharge rate has received encouraging consumer response.
