Financial highlights of 2008 year results are:
Revenue in 2006 was $3.45 million.
Gross profit increased 324% to $5.95 million in 2008 from $1.4 million in 2007. Gross profit in 2006 was $0.518 million.
Gross margin increased significantly from 29% in 2007 to 47% in 2008 due to the expansion of higher margin services business in waste management. Gross margin in 2006 was 15%.
EBITDA increased from $0.02 Million in 2007 to $1.76 million in 2008.
Operating highlights of 2008 year are:
Sancon recycles plastic silage wrap into pine posts helping Australia local government to achieve ”Towards Zero” waste strategy;
Sancon develops raw materials from recycled waste glass, used in the manufacturing of numerous consumer products;
A personal computer manufacturer selects Sancon to recycle computer packaging materials;
Sancon sponsors the development of new biofuel technology using algae, the Future Fuels Consortium which comprised the South Australian Research and Development Institute, Flinders University and CSIRO;
In China, the company’s business continued expanding rapidly. The number of full-time and contracted employees increased from 154 to 190 in 2008. The company has processed around 14 million waste glass bottles in 2008 to produce reusable raw materials. Nine additional trucks were purchased during 2008 taking the total number of trucks to 49 at the end of 2008 to expand our logistic operations.
In Australia, despite economic downturn, the company did not lose any customers. The company continues to process industry and consumer recyclable wastes from companies such as Toyota, Ford, Masterfood, Hella and Woolworth supermarkets.
In Hong Kong, due to the poor performance of the material trading business and ever narrowing margins since its inception and unlikelihood of it will generate any meaningful profit in the future, the company decided to dispose its subsidiary GuangCheng. The company will focus on higher margin businesses in China and Australia.
“The year 2008 represented a year of strong operating performance, as the Company generated the highest annual revenue in its history, reported improved gross margins reflecting a more favorable mix of business, and recorded a year of profitability,” said Jack Chen, Sancon’s chief executive officer. “We were able to accomplish this result despite suffering the current economic crisis. The Chinese Government is emphasizing environmental policies & projects for all sectors of the economy and corporate entities”.
Chen continued, “On August 2008, China’s top legislature passed a law to promote a circular and recovery economy and will come into force on January 1, 2009. The aim of the law is to boost sustainable development through energy saving and reduction of pollutant discharges. This backdrop provides an excellent growth opportunity for Sancon in China. We aim to continuously expand our recycling and waste management operations in China by setting up larger network of processing facilities and logistics operations around China. Meanwhile, we are developing new processing facilities aiming at electronic waste materials and electronic production waste. We believe these strategies will support our growth throughout 2009.”
