Asia Packaging has signed a purchase agreement to acquire JinJiang City Anhai Hongrizhong Plastic Color Printing, after announcing its quarterly results to the end of 2011.
Asia Packaging says it achieved revenues of US$11m for the quarter, representing 8.7 per cent growth over the corresponding period last year, adding it owed the improvement largely to a change in product mix towards higher price, higher margin products. Its higher value product sales contributed to an increase in gross profit margin during the third quarter to 27.3 per cent from 24.9 per cent in the same period of last year.
The company achieved ebitda before stock based compensation of US$2.8m during the third quarter representing a 13.7 per cent improvement over the same period of last year. Net income increased 10.3 per cent for the third quarter to $2.3 million, compared with US$2.1 m during the same period of last year.
Wenge Hong, president and chief executive officer of Asia Packaging, said, “We are pleased to report that we have improved our performance as we continue to shift our product focus towards higher margin Medical products. Further, the acquisition of Anhai Hongrizhong will increase our mix of higher margin products while bringing us closer to larger customers. The Anhai Hongrizhong business generated over US$6m in revenue last year and is profitable. Given the minimum share dilution, the acquisition is expected to be immediately accretive to the earnings per share of Asia Packaging.”
“With the change in product mix towards medical packaging and away from the commodity CPP film products, gross margin improved during the third quarter to 27.3 per cent from 24.9 per cent during the same quarter of last year.”
Asia Packaging, through its wholly-owned subsidiaries in the People's Republic of China, manufactures packaging products and services to the food and pharmaceutical industries in China. The company operates a 38,000 square meter plant located in Yichun City, Jiangxi Province.