SYDNEY–(BUSINESS WIRE)–#chinaecommerce–eCargo Holdings Limited (ASX: ECG) (ECG, eCargo or the Group) today announced its financial results for the year ending 31 December 2020, demonstrating a strong recovery in the second half of the year.
- Group revenue increased 23% to HK$218.5m (A$36.6m)
- ECG achieved Group-first EBITDA profit of HK$7.6m (A$1.3m)
- Net Loss After Tax of HK$39.5m (A$6.6m) due to a non-cash impairment of HK$33.5m
The results were primarily driven by implementation of operational efficiencies and a focus on channel management to further leverage growing consumer demand for online retail.
- FMCG segment was major growth driver, accounting for 53% of total group revenue, with both online and offline results up 104% and 31% respectively, benefitting from the full year contribution of Metcash Asia (acquired in Feb 2019) and sales acceleration in Q4;
- Vietnam joint-venture, ABG, generated revenue of HK$167.0m (up 401%), with sales benefitting from growing regional demand;
- eCommerce enabling business recovered strongly in H2, benefitting from the introduction of new brands and online sales growth. EBITDA increased 44% due to shift in the sales mix towards higher margin products and success in sales events (e.g. Double 11 and 618) generating high sales commissions;
- Amblique EBITDA improved to HK$12.2m (despite revenue drop to HK$85.2m) due to better cost control and recovery in projects in H2, as clients invested to grow online presence. The long-standing reseller agreement with Salesforce Commerce Cloud ended in Jan 2021, but anticipated new business in China eCommerce and FMCG divisions will help offset the expected decline in FY21 results.
Lawrence Lun, Chief Executive Officer of eCargo, said: “Despite a challenging year, we were able to leverage the shift in Chinese consumer behaviour towards eCommerce and brands’ needs to enhance their online presence. We delivered a strong Q4, having implemented operational efficiencies and noted significant turnarounds in the performance of both our distribution trading and B2B eCommerce enabling business. Our strong finish to FY20 was also underpinned by a shift to be more selective regarding brands we work with – not only focusing on categories where we identify strong consumer demand, but also leveraging our market expertise when assessing brands suitability for China.
“We anticipate Chinese consumer demand for international products will continue to grow in FY21, particularly health, beauty and personal care categories – all areas of focus for eCargo. We also see huge opportunities to employ new technologies to further our growth, in particular exploring new innovations in Supply-Chain IT Financing solutions.
“We now have the right structure, strategy, plans and team in place and are well positioned to grow in FY21 and beyond as we capture strong demand for international brands in China.”
The underlying financial statements supporting the figures in this announcement are prepared in Hong Kong Dollars (HK$) and all figures in Australian Dollars (A$) are for reference only. The exchange rate applied to translate HK$ into A$ is A$1.00=HK$ 5.9707, according to the rate published by the Reserve Bank of Australia as of December 31, 2020.
Adjusted EBITDA is defined as earnings before non-cash items such as interest, tax, depreciation, amortization, share of results of a joint venture, impairment provision for interest in goodwill, and impact of foreign exchange.
About eCargo Holdings Limited
eCargo Holdings Limited is an ASX-listed company specialising in sales and marketing strategy, execution and distribution in China. eCargo’s broad range of capabilities cover logistics and fulfilment, eCommerce management and operations, Online-to-Offline (O2O) distribution and wholesale, as well as strategic advice.
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