Here's a plug for NMO, PE of 7
TORONTO, ONTARIO--Noble China Inc. had net income of $5.4 million
($0.50 per share) for the year ended December 31, 1998 compared
with $3.4 million ($0.21 per share) for the previous year. This
was after arbitration costs of $1.3 million ($0.12 per share),
down sharply from $4.0 million ($0.24 per share) in 1997. Net
income per share before arbitration expense was $0.62 (1997 -
$0.45). (Per share amounts for 1998 reflect the cancellation of
5,442,163 common shares in 1998.)
A lower volume of beer sold from the Zhaoqing Noble Brewery (1.43
million hectolitres in 1998 compared with 1.47 million hectolitres
in 1997) accounted for sales of $62.8 million for the year
compared with $66.3 million in 1997. The lower volume was a
result of slower economic growth and extensive flooding in a large
part of the country, which dampened sales. Despite the lower
volumes and the expenses associated with increased marketing
support, the Zhaoqing Noble Brewery continued to report strong
earnings as a result of an improved product mix, aggressive cost
savings and improved efficiencies. The Zhaoqing Noble Brewery
continues to be one of the most profitable breweries per hectolitre in China.
The Zhaoqing Noble Brewery declared a RMB 103 million dividend in
March, 1999 which will be paid in instalments over the course of
1999. Noble's share of the dividend is approximately $11.1
million. The first instalment of approximately one third of the
dividend is expected to be paid to Noble in May.
Noble's share of dividends declared by the Zhaoqing Noble Brewery
over the last 5 years now stands at $49 million.
The Company's consolidated net cash position at December 31, 1998
was $18.0 million ($1.66 per share), an increase of $2.5 million
from December 31, 1997. Of this, $7.8 million was on deposit with
financial institutions outside of the P.R.C. /T/
FINANCIAL SUMMARY
-----------------
1998 1997
---- ----
Net Sales 62,842,184 $66,311,988
Net Income 5,359,362 $3,377,034
Per Share Data (1) Net income before arbitration
expense $0.62 $0.45
Net income $0.50 $0.21
Operating cash flow $0.89 $0.47
Shareholders' Equity $10.11 $6.08
Common Shares Outstanding
(weighted average) 10,815,083 16,325,648/T/
(1) Reflects cancellation of 5,442,163 common shares effective January 1, 1998.
Northern Breweries
Noble's financial results for the past several years have included
only the results of the Zhaoqing Noble Brewery and not the
results of Noble's other two Chinese breweries, the Shouguang
Brewery and the Shanhaiguan Brewery, which are located in the
northeastern part of China.
The Company's partners in these two joint ventures have refused to
allow the Company to assert its ownership rights or to provide
sufficient financial information to allow the Company to include
the results of these operations in its financial statements until
funds which they claim were misappropriated by Mr. Lei, the former
Chairman of the Company, and his associates are returned to them.
Management has been discussing a settlement of these issues with
both breweries and the Company expects to finalize its settlement
of discussions with one of the breweries very shortly.
Noble is confident that it will be possible to resolve its
ownership interests with both Northern Breweries during the
current fiscal year. Enforcement of Arbitration Award
Noble is owed a net amount of $94.0 million under the Arbitration
Award which was made in the Company's favour in April, 1998. The
Company obtained a judgment of the Ontario Court (General
Division) enforcing the Arbitration Award in February, 1999 and it
is actively pursuing collection of the award in Ontario, Hong Kong
and China. Assets which the Company intends to claim have been
identified in each of these jurisdictions. 1999
The Company's strategy for growth and enhanced profitability in
1999 comprises four distinct elements:
- Work with our partners in the Zhaoqing Noble Brewery and with
Pabst US to develop the most effective strategies for the
long-term growth and profitability of the Pabst Blue Ribbon brand in China.
- Resolve our ownership interests in the two Northern Breweries
and begin to integrate these breweries into our long term
strategic plan for growth in China.
- Launch a lower cost/high quality brand to compete with local
Chinese brands and utilize the capacity in the Zhaoqing Noble Brewery.
- Continue to seek efficiencies and cost reductions that further
improve the performance of the Zhaoqing Noble Brewery. Normal Course Issuer Bid
On March 15, 1999 the Company received approval to repurchase up
to 865,383 of its outstanding common shares commencing March 17,
1999 and ending March 16, 2000.
At March 31, 1999 the Company had repurchased a total of 50,600
common shares pursuant to the normal course issuer bid at an
average price of $2.75 per share. -30-FOR FURTHER INFORMATION PLEASE CONTACT:
Noble China Inc.John PennalPresident & Chief Executive Officer(416) 956 4906
(416) 956 4907 (FAX)E-mail: nci@noblechina.comWebsite: www.noblechina.com |
