DEAR SHAREHOLDERS,
On behalf of Agritrade Resources Limited, I am pleased to update you on our key developments in the past financial year and achievements to date.
INCREASED PRODUCTION
Since operations commenced in 2010, our coal production capacity is now running at 2.5 million tonnes per annum. This quick ramp-up is now feeding into our financial results, with revenue from coal production increasing 488% year-on-year from HK$72.7 million in the financial year ended 31 March 2011 (“FY 2011”) to HK$427.2 million in the financial year ended 31 March 2012 (“FY 2012”). Backed by efficient mining processes and large mineable reserves of 117.8 million tonnes, we are on track for 6 million tonnes of annual production capacity by 2014/2015 with huge potential for further growth.
RISING REVENUES
The Company has recorded an impressive increase in revenue and gross profit from continuing operations due to the significant ramp-up in production capacity, with revenue rising by 143.7% from HK$216.6 million in FY2011 to HK$527.9 million in FY2012. Gross profit also jumped 527.5% year-on-year from HK$16.5 million to HK$103.7 million. Gross profit margin rose 12 percentage points to 19.6%, enabled by economies of scale from the increase in coal production.
STRATEGIC DEVELOPMENT
Research and development plays a key role at the heart of the Company, and our SEM coal is now well respected in the market for its quality and consistency. We are focused on continually improving the quality of SEM coal and our pioneering coal upgrading plant will see us make great strides in this aspect in the coming year.
The Company also continues to make our mark by investing in first class infrastructure to drive capacity, and strengthening our network of customers across the region. We have built a business with strong foundations supported by our pit-to port integrated supply chain solutions: from coal origination, processing and logistics to delivery and distribution, each aspect of the Company is geared towards maximising efficiency and reducing cost. We believe this strategy will position us for tremendous growth ahead.
OUTLOOK
With the rapid expansion of industrial development, the growth in demand for thermal coal for power generation will remain robust, particularly in China, India and Indonesia. As energy consumption continues its shift towards a more environmentally sustainable model, the Company is working hard to ensure that our low-pollutant, low-sulphur coal plays a key role in the future of energy.
APPRECIATION
On behalf of the Board, I would like to extend my sincere gratitude to the Directors, the management team, staff members, customers, suppliers, business partners, bankers and shareholders for their support and contribution to the Company over the years. I look forward to updating you further on our progress and I thank you for your continued support.
With Warm Regards,
Rashid Maidin
Chief Executive Officer
Agritrade Resources Limited
