Narada Reports Strong Performance During 2012

SHANGHAI, Apr. 1 (SMM) – Narada Batteries reported RMB 3.1 billion in operating income for 2012, up 84.32% from 2011. The company’s profit was up RMB 200 million from last year, or 73.9%, with net profits distributable to the listed company up 76.85% YoY to RMB 126 million.

Narada’s two subsidiaries, Narada Huayu Power Source and Changxing Narada Power Source, which reported RMB 1.36 billion and RMB 600 million in operating incomes last year, respectively, were responsible for the surge in gross revenue. When Narada acquired the two companies in September 2011, their income for the first three quarters in 2011 was not consolidated into Narada’s 2011 annual report, but last year the full-year revenue of these two companies contributed to a 64.1% growth in Narada’s total earnings. In addition, Narada’s income from overseas and domestic market increased RMB 90 million and RMB 387 million, respectively.

Revenues in 2012 from the company’s three major businesses, backup batteries, motive batteries, and energy storage batteries, were RMB 1.57 billion, RMB 1.42 billion, and RMB 84 million, respectively, and rose 25.41%, 213%, and 50.11% YoY. Growth in backup batteries has lagged other emerging sectors such as electric vehicle batteries and energy storage batteries, so the company stated in its annual report that it will focus on development of emerging sectors while maintaining its large market share in backup batteries.

The company’s annual report also showed declining profit margins in traditional lead-acid batteries, which illustrates a larger looming problem in China’s lead-acid battery industry. The oversupply of lead-acid batteries caused by capacity expansion at large enterprises caused cuts in prices, so Narada’s profits from backup batteries and motive batteries fell by 0.94% and 7.28% YoY, respectively, while margins from new lead carbon batteries rose 2.61% YoY.