Cost cuts cook up profit rise for Supor

ZHEJIANG Supor Cookware Co reported yesterday that its net income rose 39 percent year on year in the first half as a result of cost cutting and increased sales.

The company's profit surged to 102 million yuan (US$14.88 million), or 0.23 yuan a share, and sales jumped 32 percent to 1.77 billion yuan in the period, the cookware maker said in a statement to the Shenzhen Stock Exchange.

Supor estimated that its profit will grow 30 percent in the first three quarters of this year compared with a year ago. The company, which is 51.31-percent controlled by French cookware producer Groupe SEB, attributed the growth to its reduction in operation expenses and better small-appliance sales.

"We took advantage of the scale effect to offset rising material costs and enhance labor productivity to cut operation expenses in the period," the company said.

Zeng Lingbo, an analyst at China International Capital Co Ltd, said Supor's earnings per share figure matched the research house's expectation.

"It maintained rapid growth despite the appreciation of yuan, a decreasing export tax rebate and rising material costs in the first half, so we are optimistic about Supor's development," Zeng said.

Supor's sales of small appliances jumped 72 percent to 831 million yuan in the period, and gross profit margin gained 5 percentage points to around 30 percent.

"After introducing SEB as its controlling shareholder, Supor has less difficulty in technology development, and its capacity expanded quickly," Zeng said.

Source: Shanghai Daily