Man Sang Sales Down 11.2%

-- JCK-Jewelers Circular Keystone, 8/15/2008 10:44:00 AM

Man Sang Holdings, Inc. reported that net sales for the first quarter fell 11.2 percent to HK$89.4 million ($11.4 million), consisting of HK$81.9 million ($10.5 million) attributable to its pearl operations and HK$7.5 million ($959,825) attributable to its real estate operations.

Net income decreased for the Hong Kong-based company 52.8 percent to HK$8.9 million ($1.14 million), year-over-year, for the period ended June 30.

Meanwhile, gross profit for the company increased 4.3 percent to HK$36.6 million ($4.6 million) for the period, consisting of HK$32 million ($4.1 million) attributable to our pearl operations and HK$4.6 million ($588,690) attributable to its real estate operations.

Net sales attributable to pearl operations decreased 18.7 percent to HK$81.9 million ($10.5 million) for the quarter.

“Decreases in net sales attributable to our pearl operations were primarily due to a decrease in market demand in the United States due to the relative weakness of the United States economy,” the company said in a statement.

Net sales to the United States fell 46.4 percent, year-over-year to HK$18.3 million ($2.3 million) for the quarter. Net sales to the Europe market increased 18.4 percent to HK$36.1 million ($4.6 million) for the period.

Gross profit attributable to the company’s pearl operations decreased 8.8 percent to HK$32 million ($4.1 million) for the quarter. Gross profit margin increased from 34.8 percent for the period to 39.1 percent for the period.

“The increase in gross profit margin was primarily due to the implementation of effective cost controls and the enhancement of production efficiency,” the company said.

Net sales attributable to the company’s real estate operations were HK$7.5 million ($959,794) for the quarter. Gross profit attributable to real estate sales was HK$4.6 million ($588,672) for the period. Gross profit margin attributable to real estate sales was 61.1 percent.

In its trends forecast, the company said, “Emerging weaknesses relating to recent developments in the subprime lending market in the United States and the impact of such developments on the United States economy may threaten market conditions in the United States and globally.”

The company said it still expects to meet its growth estimates for the second quarter to increase its focus on the European market.

Man Sang Holdings, Inc. and its subsidiaries (together the "Man Sang Group") are one of the world's largest purchasers and processors of Chinese cultured and freshwater pearls. The Group had two main business segments during the year. One business segment is engaged in the purchase, processing, assembling, merchandising, and wholesale distribution of pearls and jewelry products and the other is engaged in real estate development and real estate leasing.