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Cathay Swings To First Half Profit Aided By Pharmaceutical Business

Fri, 28th Aug 2020 14:40

(Alliance News) - Cathay International Holdings Ltd on Friday posted a big swing to profit in the first half of 2020 despite a drop in revenue during the period.

Shares in the China-focused healthcare investor were trading 16% lower at 1.09 pence each on Friday afternoon in London.

For the six months ended June 30, Cathay posted a pretax profit of USD69.1 million, swinging from a loss of USD2.4 million the year prior. This was despite revenue falling 8.1% year-on-year to USD35.2 million from USD38.3 million as income from the hotel business plunged amid the Covid-19 pandemic.

Administrative expenses were USD11.2 million, down from USD14.3 million.

The company said its positive profit performance was mainly primarily driven by the pharmaceutical business at its 53%-owned subsidiary Lansen Pharmaceutical Holdings Ltd. It added it also saw an increase in sales from its Haizi and Natural Dailyhealth businesses

Lansen recorded a 2.4% increase in revenue to USD26.8 million and profit margin was 67%, up from 62%.

Healthcare company Inositol Haizi - which sells di-calcium phosphate, a nutritional supplement and food additive for flour, cakes and milk powder - recorded sales of USD3.1 million, up from USD2.8 million. Gross margin was negative 86%, however Cathay said Haizi will continue to lower its production costs by modifying its production plant and by developing higher value-added co products to strengthen its competitive position.

Natural Dailyhealth Holdings Ltd revenue increased to USD3.5 million, up from USD2.9 million while Cosmetics Botai - which sells injectable collagen lip-fillers - recorded revenue of USD200,000 compared to zero the year prior.

Looking ahead Cathay said: "The group plans to strengthen its online marketing efforts and develop an integrated e-commerce ecosystem for the group's pharmaceutical, healthcare and cosmetic sectors."

Cash held as at the end of June was USD40.6 million.

By Ife Taiwo; ifetaiwo@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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