SFS maintains target, 9M profit at EUR 18.7 mln

SFS Group Public Company Ltd (SFS.CY) reported its nine months 2008 results, with profit after tax attributable to shareholders declining by 0.38% Year-on-Year to EUR 18.65 mln from EUR18.72 mln a year ago in the same period.
Management maintained its net profit target of EUR 31 mln for the year.
Total revenue showed an increase of 18.4% reaching the amount of EUR 88.1 mln compared to EUR 74.4 mln in the corresponding 2007 period. Revenue from the financial services division stood at EUR 9.8 mln compared to EUR 10.2 mln in 2007, showing a marginal y-o-y decrease (profit margin of 25% vs. 45% in 9M 2007). Revenue from shipping operations presented an increase of 45% to EUR 38.7mln (+45%) mainly driven by the increase in the number of containers transferred by the Company’s subsidiary Inter Marine Container Lines. On the other hand, revenue from the property segment decreased by 45% to EUR 6.3 mln since no property was sold during 9M of 2008 compared to a profit of EUR 8.6 mln from disposal and revaluation of investment property in 9M 2007.
In addition, the Company delivered villas at Larnaka Bay Resort amounting to revenue of EUR 6.1 mln, compared to EUR 1.5 mln revenue in 2007. Other revenue, was down to EUR 6.6 mln compared to EUR 10.3 mln in 9M 2007, as a result of the contribution of negative goodwill write-off in 2007, arising from the acquisition of White Knight Holdings.
On the cost side, Group’s selling and distribution expenses increased by 3% to EUR 3.4 mln, while administrative expenses were up 9% to EUR 11.6 mln. Depreciation
and amortisation expenses fell following the disposal of the Group’s nine ships during the first nine months of 2008. The Group’s finance costs were also reduced by 42%, due to repayment of loans arisen from the disposal of the Group’s vessels.
The Group’s financial position was stable during the first 9 months of 2008, showing a decrease in total debt of EUR 33.9 mln, standing in at EUR 44.7 mln from EUR 78.6 mln in the corresponding period of 2007, through repayment of debt using the proceeds of the property sales and the sale of shipping subsidiaries.
SFS also announced that the total funds raised from the exercise of warrants in December 2006 and 2007 stood at EUR 6.5 mln. These funds were used for the payment of the bank overdrafts. As a result, the current liabilities have dropped and there is an opportunity for further finance of the working capital.