Dynetek Industries Ltd has reported strong results for the three months and the twelve months ended December 31, 2006 despite business being dogged by supply problems.
Revenues from cylinder and systems sales for the twelve months ended December 31, 2006 reached $35.9m, an increase of $12.4m or 53 per cent compared with the twelve months ended December 31, 2005.
Revenues from cylinder and system sales for the three months ended December 31, 2006 were also strong with an end figure of $11.3m, an increase of $5.4 million, or 92 per cent compared with the same period of 2005.
Christian Rasche, president and chief executive officer, noted that the increase in fourth quarter revenues reflects shipments that were deferred from the second and third quarters due to delivery delays in raw materials. As noted in Dynetek's second quarter 2006 report, heavy rains and flooding shut down the manufacturing plant of a key raw material supplier and prevented it from delivering for a period of time.
Although Dynetek has worked closely with the supplier to overcome past delivery issues, many shipments by Dynetek of cylinders and systems were delayed from the second and third quarters into the fourth quarter. Normally Dynetek ships its products by sea at low cost. In order to maintain market leadership and customer needs, Dynetek incurred unexpected airfreight costs of approximately $1.3m and additional labour and overtime costs of approximately $0.2 million in order to fill our European orders by year end.
$quot;2006 was a tremendous year for cylinders and system sales for Dynetek,$quot; noted Mr. Rasche. He also explains, $quot;we were frustrated in 2006 with our raw material supply and the difficulties it caused in our ability to deliver to our customers. Without the additional airfreight expense and labour costs, Dynetek would have been profitable.$quot;