Dear Shareholders,
It has been an exciting and immensely satisfying year for Asia Enterprises as the financial year ended 31 December 2007 (“FY2007”) marked a milestone in our history with the Group scoring achievements that have enhanced our industry reputation and corporate standing.
Not only did we expand our business and attain another year of record-breaking financial performance, the Group also gained wider recognition with our ranking as one of Forbes Asia's 200 “Best Under A Billion” companies in September 2007. It is truly an honour that our achievements and consistent financial performance have been recognised by an internationally renowned organisation like Forbes.
Since our listing on the SGX-ST in September 2005, our management has been working actively to raise awareness and improve appreciation of the Group's business with the investing community. While Asia Enterprises is still a relatively young company on the SGX-ST, these efforts have begun to yield encouraging results, thanks to our strong financial performance as well as growing interest in companies operating in the steel industry.
During FY2007, the regional steel industry saw another year of growth, underpinned by firm global steel prices as well as buoyant demand for steel from the shipbuilding and marinerelated sectors and the recovering construction industry.
Against this positive backdrop, Asia Enterprises registered a third consecutive year of record revenue and net profit. Group net profit grew 28% to S$19.6 million in FY2007 on healthy revenue growth of 23% to S$182.9 million.
In fact, our Group has consistently been profitable since entering the steel distribution business in 1973. This is no mean feat given the competitive nature of an industry which is facing increasingly shorter order visibility and business cycles. Our success can be attributed to three factors - our conscientious assessment of market trends; our efficient inventory management to ensure prompt service to our customers; and our strict adherence to prudent financial principles, which enables the Group to maintain a sound financial position.
Indeed, the prestigious Forbes accolade and our achievements in FY2007 goes out to everyone at Asia Enterprises as it could not have been possible without your hard work and commitment. I would therefore like to thank all our colleagues for your valuable contributions that have taken the Group from strength to strength over the years.
Going forward, we will continue to work hard to enhance shareholders' value. With global steel consumption expected to be led by Asia, where rapid industrialisation and robust growth of infrastructural developments continue to drive the demand for steel, we believe Asia Enterprises is well-placed to further strengthen our industry position as a Regional Steel Distribution Centre.
Due to continuous strong activities in the shipbuilding and offshore marine sectors, many of the shipyards in the region currently have order books that stretch into 2011. As a specialist in the distribution of steel products to the shipbuilding and marine-related sectors, we expect to continue benefiting from the thriving prospects of our customers. With these sectors as our primary focus, we also intend to capitalise on the growing demand from the construction industry in Singapore, which is expected to strengthen further with the announcement of exciting infrastructure projects such as the Sports Hub and MRT extensions in addition to the recovering private property market.
We are continually working to widen our coverage of other territories in the region that offer opportunities for growth and to reinforce our positioning as a 'One-Stop' steel supplier by expanding our product range and services to fulfill the varying requirements of our diverse customer base.
In addition, we are actively exploring strategic alliances or acquisitions that will enhance our current business. While the overall demand for steel is anticipated to remain firm, we are mindful of competition in the region and the increasing concerns of a possible slowdown in the global economy. To this end, we will continue to maintain a sound financial position which has enabled the Group to weather periods of difficult business conditions over the past 34 years.
To reward our Shareholders, the Board of Directors is proposing to distribute approximately 40% of Group profit attributable to equity holders as dividends. This will translate into a dividend of 2.857 cents per share, which is an increase of 28% from the 2.239 cents we paid for FY2006.
In closing, I would like to again thank our management and staff for your dedication, commitment and contribution in FY2007. I would also like to express my utmost appreciation to all our customers, suppliers, as well as you, our Shareholders, for your unwavering support of Asia Enterprises.
Lee Choon Bok
Executive Chairman and Managing Director