(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
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