For personal use only. Mesbon China Nylon Limited ACN Annual General Meeting 16th May 2011

Transcription

1 Mesbon China Nylon Limited ACN Annual General Meeting 16th May 2011

2 Welcome by Chairman Mr Zhehao Shen

3 Ladies and Gentlemen, It gives me great pleasure to welcome you all to this annual general meeting. I especially would like to welcome my fellow directors who are here with us today. They have been very supportive of the company as it now looks to both facility expansion through the Phase 4 development and also the technical challenges of producing finer denier yarn for higher quality products. I would also like to sincerely welcome all shareholders and visitors who are here today.

4 I appreciate your interest and hope that at the conclusion of today s meeting, you will have a better understanding of the company and its performance. During 2010 Mesbon continued its research and development activity and is now producing 20 denier nylon filament for weaving into high quality garments and is providing improved high quality dope dyed yarns through changing the injection process. I am particularly proud that the company was awarded the OEKO-TEX Certificate which means that the company meets the human-ecological requirements for products with direct contact to skin.

5 At the end of the year, the company also announced that it had commenced development of the Phase 4 facility which will enable even finer denier yarn to be produced. The first stage of production should be ready for operation during January I am also pleased to report that first quarter results for 2011are promising, with an unaudited net profit of approximately RMB 13.4 million (AUD $2.1million) which is an increase of approximately 10% on the previous comparative period.

6 After the formal part of the meeting, we will make a presentation to you to better describe the position in which the company finds itself. At that stage, you will be welcome to ask questions and discuss the company and its progress. I again thank you all for coming today and I will now hand back to Mr Paul Teisseire to lead the formal part of the meeting.

7 Managing Director s Presentation On behalf of Mr Zhehao Shen By Mr Paul Teisseire

8 Performance Highlights 2010 Performance Higher quality Nylon-6 FDY yarn received acceptance Developed 20 denier nylon filament for weaving into high quality products Awarded as a High Technology Enterprise by the Ministry of Science & Technology in China Awarded OEKO-TEX certificate for products with direct skin contact Sales increased 53% to RMB 1,070.4 million NPAT increased 151% to RMB 43.2 million Earnings per Share increased from 2.04 cents to 4.93 cents Production approximately 45,000 tonnes (2009: 35,000 tonnes)

9 Financial Results (Expressed in RMB) Movement Revenue 1,070 mil 701 mil 369 mil EBITDA 96.3 mil 58.8 mil 37.5 mil EBITDA % 9.0% 8.4% NPAT 43.2 mil 17.2 mil 26.0 mil Dividend (Unfranked) 0.0 cents 0.5 cents EPS basic 4.93 cents 2.04 cents 2.89 cents Total Equity mil mil 39.2 mil Gearing ratio 55% 52% Solid revenue growth Margins maintained EPS increased Higher gearing higher due to business expansion

10 Trading Expectations for 2011* The expansion in the Chinese domestic economy is strong in 2011 Mesbon is at full capacity until Phase 4 is commissioned Trading in the first quarter has been strong Gross Margins have improved but admin & finance overheads are higher April 2011 has maintained the trend of the March result Forward projections are consistent with results to date Interest on borrowings will be higher through funding of Phase 4 * Based on Management Results for Zhejiang Chemical Fiber Limited to March and Forecasts to December 2011 using Chinese standard accounting principles. Actual Results subject to audit at 30 June 2011 and 31 December 2011 and subject to adjustment to IFRS accounting standards

11 Trading Expectations for 2011* (RMB) March 2011 Actuals Half Year to June 2011 Forecast Revenue 278.0m 500.0m EBITDA 30.9m 55.1m EBITDA % 11.12% 11.02% NPAT 13.4m 20 22m EPS basic** 1.5 cents 4.1 cents * Based on Management Results for Zhejiang Chemical Fiber Limited to March and Forecasts to June 2011 using Chinese standard accounting principles. Actual Results subject to audit at 30 June 2011 and subject to adjustment to IFRS accounting standards ** Based on a currency exchange rate of 6.70RMB:AUD

12 Strategic Review Outlook 2011 and beyond concentrating on review of Capital Structure and Future Direction Trading Conditions Mesbon is trading well to date Continuing the move towards premium product Further development in dope dyed yarn in DTY and fine denier in FDY Development of Phase 4 will impact 2011 results 2012 will see benefit of 2011 investment in Phase 4 Profit not expected to increase for the full year 2011 Tightening of domestic credit to counter inflationary pressures Anticipated increase in RMB to USD impacting revenue and profitability Increasing production costs World economic outlook uncertain *NPAT expectations based on Management Accounts to March 2011 and subject to audit adjustments and economic predictions. Based on exchange rate of RMB6.70 : AUD$1.0

13 For personal use only Phase 4 Development

14 Current board members Zhehao Shen Bolong Xing Weijie Gu Paul Teisseire Fai Peng Chen Chairman & Managing Director Non-executive Director Executive Director Non-executive Director Non-executive Director

15 Mesbon China Nylon Limited