By WEE LI-EN

AIRPORT logistics systems provider Inter-Roller Engineering reported record turnover and profit after tax for the first half.

It also declared a Q2 one-tier tax-exempt dividend of 1.5 cents a share based on its higher number of post-share split shares.

First-half group turnover jumped 77 per cent to $77.2 million from $43.5 million for H1 2005 while net profit surged by 99 per cent to $13.4 million from $6.7 million.

Senior vice-president Roger Chiman said that the increase in net profit margin from 15.4 per cent for the first half last year to 17.3 per cent for H1 this year was due to greater economies of scale. 'The increase in turnover coincided with a less than proportionate increase in direct costs,' he said.

The company also said that new orders for 2006 are not likely to be at the same level as 2005, given that high oil prices and increased tensions in the Middle East are likely to cause a postponement of airport capital spending in the near future.

While analysts say that the company's performance exceeded expectations, they expressed concern about the company's ability to maintain its performance. 'We're looking at a landing from what they achieved, and the question is how great the slowdown in growth will be,' Goh Han Peng of Kim Eng Securities said.

'Inter-Roller would be under pressure to secure more orders to maintain its dividend policy,' Johnny Teo of NRA Capital said.

The company had earlier also declared a dividend of 1.5 cents per share for the first quarter, bringing total dividends paid and payable for the first half to $7.4 million.

For the 2005's interim period, its net dividend payments totalled 2.5 cents a share.

Mr Chiman said that the company would strengthen its coverage in Asia, Middle East, Europe and America, focusing on growth while sustaining profitability.

《The Business Times》