The initial public offering of the company's shares was sponsored
by DBS Bank Limited.
Press Release - embargoed till 5:05 p,m. on 10 August
CDW'S FIRST HALF NET PROFIT FALLS BUT EXPECTS BETTER SECOND
HALF. INTERIM DIVIDEND OF 0.4 US CENT PER SHARE DECLARD.
SINGAPORE, 10 August 2005- CDW Holding Limited ("CDW"
or the "Group"), a Japanese-managed precision components specialist
announced a 27.2% decline in net profit for the half year
ended 30 June 2005 but management expressed confidence in
a business rebound in the second half of the year in view
of the Group's solid fundamentals and the implementation of
the appropriate business strategies to take advantage of changing
In the first half of 2005, Group revenue was US$44.7 million,
operating profit was US$5.9 million and net profit was US$5.1
million, representing declines of 1.6%, 27.4% and 27.2% respectively
as compared with the first half of 2004.
An interim dividend of 0.4 US cent per share is proposed
and will be payable to the shareholders on 23 September 2005.
Due to general pricing pressure on its products, the Group
recorded a drop in net profit margin by 4.1 percentage points
to 11.4% for the first half of 2005. A slowdown in the orders
of LCD BLUs also led to a flattening in revenue.
"Despite this, we believe that the decline in revenue
is short-term, and does not reflect significant changes in
the Group's fundamental strengths." said Mr Yoshimi,
the Chairman and CEO of the Group. In the second quarter,
CDW encountered delays in the launch of new product models
which affected our customers.
"The fundamentals underlying the Group's growth remain
intact," said Mr Yoshimi. "Japanese manufacturers
continue to pursue a trend of outsourcing their production
processes to low cost centres such as the PRC. There is also
a continuous growth in mass demand for mobile communication
equipment, as well as for consumer, IT and entertainment products.
In addition, we continue to witness rising consumer affluence,
especially in the PRC and rapid technological innovation,
leading to higher upgrade rates and shorter replacement cycles.
And, CDW is in the right place and the right time to benefit
from these development."
However, Mr Yoshimi emphasized it is imperative for the Group
to further strengthen its business strategies in view of the
rapidly evolving market landscape. Among others, it needs
to further improve its competitiveness in the face of competition
from other producers. The Group also needs to develop a broader
and more diversified customer base. Equally important is to
continue increasing our responsiveness to market changes as
new model rollouts of IT / communications products, especially
of mobile phones are more frequent resulting in smaller production
quantities and shorter product cycles.
An important element of CDW's business expansion plan is
to identify products and industries with promising growth
as well as to develop specialized products for targeted sectors.
It will also expand its product range and capabilities to
meet the diverse outsourcing needs of customers, especially
in the design of the latest products. To expend its production
capacity and widen its geographical coverage, the Group's
new factory in Dongguan will commence operation in the second
half of 2005.
The Group will maintain and strengthen its existing customer
base by becoming their lead supplier of select strategic products.
At the same time, in a bid to diversify the customer base
the Group will step up its efforts to secure new clients.
The opening of the Dongguan factory will allow CDW to achieve
the duo goals of product and client diversification.
Looking forward, Mr Yoshimi expects growth fundamentals for
the Group to remain sound and expressed confidence that the
results of the second half of the year will be better.
For any information regarding CDW, please contact:
Mr. Edwin Tay / Mr. Pual Heng
Ferringtom Consultants Pte Ltd
Tel: (65) 6536 5831 / (65) 6536 5863