For immediate release
(Hong Kong, December 13, 2001) Construction specialist, Yau Lee Holdings Limited ("the Group) (SEHK:406) reported a drop in turnover from HK$927 million to HK$405 million during the six months ended 30th September 2001 as compared to the same period last year. Profit before taxation has decreased by 65% from HK$31.7 million to HK$11 million this year.
Chairman of the Group, Mr. Wong Ip-kuen attributes the decline in turnover and profit to difficult economic condition and drop in public housing output, "Contraction of the public construction market has resulted in intensified competition and a continuous drop in tender prices."
Total value of construction contracts in hand amounted to HK$1,883 million including four new contracts awarded by the Housing Authority and Architectural Services Department with total value of HK$961 million.
Yau Lee acquired a piece of land in Causeway Bay for HK$275 million in May. Subsequent to the acquisition in May, Yau Lee acquired also the land parcel adjacent to the original one for HK$24.8 million in August, enlarging the site area available for development from 8,885 square feet to 10,417 square feet. The new acquisition increased the gross floor area of the development by 22,000 square feet to 155,000 square feet. Yau Lee is planning to build a composite building of retail and office spaces and hold the building as a long-term investment.
VHSoft Technologies Co. Ltd. ("VHSoft"), Yau Lee's wholly owned subsidiary company specialized in web based project management tools and building material trading, has began generating revenue and is expected to break even in the coming financial year.
Yau Lee Wah Concrete Precast Products Limited ("Yau Lee Wah"), the Group's wholly owned subsidiary, has also been affected by the adverse economic condition and public construction market. In order to maintain competitiveness, the Group has been actively exploring opportunity by developing new products and market the products to private housing developers.
On the outlook for the second half of the year, Chairman of the Group, Mr. Wong Ip-kuen believes that control the cost and maintaining the quality will be key to maintaining competitive advantage.
"We have been able to keep interest burden at a very low level. The interest cover of the Group remained the same at 7.8 times as compare to 7.84 times at 31st March 2001. Besides, targets for cost saving have been implemented for various operating units. Beginning from January 2002, employees' salaries will be cut by up to15%."
"We keep up our dedication to quality, safety, environmental protection and innovations in products and technologies. It is our belief that with ample experience and our commitment to continuously improving ourselves, we will be able to face the challenges ahead and move forward when opportunities arise.
Further information: Choice Communication International Ltd
Simon Lee
Tel: (852) 2522 1133 / (852) 8201 5895
Email: simon.lee@choice-pr.com
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