Financial Resultsopen

Turnover for the period under review amounted to US$1,784 million, 11.0% higher than the US$1,607 million reported for the same period last year. Profit attributable to Owners of the Company amounted to US$80 million as compared to US$46 million reported last year, an increase of 72.8%. Basic earnings per share was at US5.00 cents (2010: US2.92 cents).

EBITDA amounted to US$170 million, an increase of 19.9% as compared to the US$142 million reported in the same period last year.

EBIT amounted to US$115 million, an increase of 34.8% as compared to the US$85 million reported in the same period last year.

Result Analysisopen

Gross Margin

Gross margin improved to 32.9% as compared to 32.6% in the same period last year. The margin gain was the result of new product introductions, favorable product mix with higher margin products, efficient production in the new PRC facilities, effective supply chain management and improved economies of scale.

Operating Expenses

Total operating expenses for the period amounted to US$474 million as compared to US$431 million reported for the same period last year, representing 26.6% of turnover (2010: 26.8%). The Group continued to control non-strategic SG&A expenses and reinvested into strategic SG&A as planned.

Investment in product design and development amounted to US$31 million (2010: US$37 million), representing 1.8% of turnover (2010: 2.3%) reflecting efficiency improvements from the consolidated and effectively structured R&D resources.

Net interest expense for the period amounted to US$28 million as compared to US$37 million reported for the same period last year. Interest cover, expressed as a multiple of EBITDA to total interest was at 5.9 times (2010: 3.7 times).

Effective tax rate for the period was at 8.0% (2010: 3.0%). The Group will continue to leverage its global operations to further improve overall tax efficiencies.

Strategic Roadmap

Our drivers of Powerful Brands, Innovative Products, Exceptional People, and Operational Excellence are the core strengths of TTI. They enable us to achieve our strategic goals, maximizing returns.

Liquidity and Financial Resourcesopen

Shareholders’ Funds

Total shareholders’ funds amounted to US$1.2 billion, as compared to US$1.1 billion at December 31, 2010, an increase of 7.5%. Book value per share was US$0.75 as compared to US$0.69 at December 31, 2010, an increase of 8.7%.

Financial Position

The Group’s net gearing, expressed as a percentage of total net borrowings (excluding bank advance from factored trade receivables which are without recourse in nature) to equity attributable to Owners of the Company, improved to 66.1% as compared to 78.6% as at June 30, 2010. The Group remains confident that gearing will improve further after the successful implementation of key initiatives to deliver focused and stringent working capital management.

Bank Borrowings

Long term borrowings accounted for 32.1% of total debts (44.8% at December 31, 2010).

The Group’s major borrowings continued to be in US Dollars and HK Dollars. Other than the fixed rate notes and the 5-year 8.5% Coupon Convertible Bonds, borrowings are predominantly LIBOR or Hong Kong best lending rates based. There is a natural hedge mechanism in place as the Group’s major revenues are in US Dollars and currency exposure therefore is low. Currency, interest rate exposure, and cash management functions are all being closely monitored and managed by the Group’s treasury team.

During the period, the Group repaid US$5.6 million of fixed interest rate notes, refinanced by a new syndicated loan obtained in February 2011. This refinancing arrangement will lower our interest cost in future periods.

Working Capital

Total inventory was at US$801 million as compared to US$734 million for the same period last year. The number of days inventory was at 82 days as compared to 83 days as at June 30, 2010. When compared to the year end level, inventory at the end of the first half of the year is normally higher in preparation for the peak shipment period in the second half of the year.

Trade receivables turnover days were at 68 days as compared to 73 days as at June 30, 2010. Excluding the gross up of the receivables factored which is without recourse in nature, receivable turnover days were at 61 days as compared to 65 days as at June 30, 2010. The Group is comfortable with the quality of the receivables and will continue to exercise due care in managing credit exposure.

Trade payables days were 70 days (52 days at December 31, 2010).

The Group’s current ratio decreased from 1.34 times to 1.21 times and the quick ratio also decreased from 0.89 as at December 31, 2010 to 0.77. The decline was mainly due to the reclassification of convertible bonds from long term to current (refer to note 13 to the financial statements for details). Excluding the reclassification of convertible bonds, the current ratio and quick ratio was 1.31 and 0.83 respectively.

Working capital as a percentage of sales was at 20.1% as compared to 21.2% for the same period last year.

Capital Expenditure

Total capital expenditure for the period amounted to US$44 million (2010: US$47 million).

Capital Commitment and Contingent Liability

As at June 30, 2011, total capital commitments amounted to US$10 million (2010: US$9 million), and there were no material contingent liabilities or off balance sheet obligations.

Charges

None of the Group’s assets are charged or subject to encumbrance.

Human Resource

The Group employed a total of 19,360 employees (2010: 20,154 employees) in Hong Kong and overseas. Total staff cost for the period under review amounted to US$241 million as compared to US$217 million in the same period last year.

The Group regards human capital as vital for the Group’s continuous growth and profitability and remains committed to improve the quality, competence and skills of all employees. It provides job related training and leadership development programs throughout the organization. The Group continues to offer competitive remuneration packages, discretionary share options, share awards and bonuses to eligible staff, based on the performance of the Group and the individual employee.