Singapore (May 7): Sapphire Corporation announced earnings of RMB3.4 million ($0.7 million) for the 1Q ended March, down 16.6% on-year from RMB4 million on lower revenue and higher finance costs.
Revenue fell 2.2% to RMB297 million from RMB303.6 million in 1Q18 due to lower sales of railway sleepers during 1Q2019.
In line with the lower revenue, cost of sales declined 2.3% to RMB270.4 million over the quarter.
Administrative expenses, which Sapphire says comprises a large component of its operating expenses, fell 5.6% to RMB12.9 million due to prudent cost management policies, says the group.
Selling and distribution costs however rose by 18% to RMB1.9 million as there were higher training expenses, while other expenses rose 10.7% to RMB2.8 million in 1Q19.
Finance costs grew 52.7% to RMB5.75 million due to higher interest expenses on the group’s borrowings.
Cash and cash equivalents stood at RMB138 million compared to RMB135.3 million a year ago.
“Discounting the higher interest rate environment in 1Q19, we started the year with stability in our operations and financial performance. We further scaled our cost saving measures in 1Q19 which insulated us in part from the effects of increased finance costs," comments Wang Heng, CEO of Sapphire, on the latest set of the results.
"Nevertheless, the group has achieved another quarter of profitability and we are in a strong position with our two-prong strategy in place that is aligned with China’s macro urbanisation trends and environmental policies," she adds.
Shares in Sapphire closed flat at 12 cents on Monday.
