Nanjing, Jiangsu – System house Hongbaoli reported a 29% drop in 2016 annual operating profit to CNY 101 m ($ 14.7 m) in 2016, according to its preliminary earnings release issued in February. Sales remained flat at CNY 1.8 bn.
“The sales volume of our main products had grown,” said the release, “but their average price for the year decreased at various degrees, leading to a much smaller growth rate for sales value.”
“Meanwhile during the second half of the year, the price of polyurethane products’ main feedstock kept rising, putting pressure on the production cost. Increased period costs for project construction and the likes also caused the year-on-year fall in operating profit,” the release added.
In 2016 Hongbaoli received CNY 87 m compensation for properties requisitioned by the government. Such compensation minus cost has been counted as non-operating income and the company’s net profit rose by 28% to CNY 131 m.
Exchange Rates: Xe.com 1 March 2017.