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SUNPOWER Group, a China-based heat transfer technology specialist, yesterday reported a 20.59 per cent rise in net earnings to 17.4 million yuan (S$3.65 million) for the second quarter ended June 30.
The surge in net profit attributable to equity-holders, which came despite a 3 per cent drop in revenue to 163.5 million yuan, was helped by a jump in gross profit margins and a tight lid on costs.
Q2 earnings per share were 5.27 fen - up from 4.38 fen a year ago.
On a six-month basis, its net income rose 36 per cent to 24.48 million yuan, while revenue dipped 2.86 per cent to 268.9 million yuan.
During the quarter, the group reported lower turnover due to drop in sales from some business segments.
Takings from heat pipes and heat pipes exchangers dropped by 6.4 million yuan, while revenue from the pipe support business declined 3.2 million yuan.
However, this was offset by higher sales from the heat exchangers and pressure vessel business which reported a 9.5 per cent rise in turnover.
Chairman Guo Hongxin said: 'In the first half of FY09, we have secured new substantial contracts amounting to 177.8 million yuan both from domestic and overseas markets, increasing our order book to 861 million yuan.'
The group, which has seen consistent growth in order books, recently clinched a 65.9 million yuan contract to supply four sets of special-material heat exchangers.
At the same time, the group has enhanced its market competitiveness through continuous research & development, improvement in technical competency, precision in design and manufacturing, as well as building up a strong brand in the industry.
'Our efforts to adopt more stringent internal measures have also resulted in an improved rate of recovery for our accounts receivables,' said Mr Guo.
Since the second half of 2008, the global economic downturn has adversely affected the key customers of Sunpower in the petroleum, petrochemical, chemical and steel industries, but the group is gradually seeing some signs of recovery.
Sunpower also benefited from the Chinese government's four trillion yuan budget to stimulate the Chinese economy.
'Some of the projects which were originally suspended in the second half of last year due to poor economic conditions were resumed,' he added.
Looking ahead, 'we will continue to diversify into new industries and geographical markets to broaden our revenue base and control our risks', he said, adding: 'With our proven track record and leading position in China, we are confident of securing more new contracts.'
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