Bohai profit tumbles
Tianjin Bohai Chemical Industry (Group) Co, China's largest marine chemicals maker, said its net profit tumbled 90.6 per cent to 14.24 million yuan (about HK$13.22 million).
The disastrous profit was plagued by a sharp fall in product prices and the rising utilities costs, resulting in a significant drop in the gross profit margin.
Before an exceptional gain, the H-share company's operating profit plunged 88.5 per cent to 18.14 million yuan, despite a 0.8 per cent rise in sales to 2.81 billion yuan.
Bohai recorded an exceptional item of 7.88 million yuan which - subsidy granted certain new production - down from 22.32 million yuan a year ago.
Earnings per share were one fen. No final dividend will be given.
The company said in an announcement last night: '1996 was proved to be the most difficult year for the company since its establishment.' Bohai has been battered by dwindling product prices as a result of excessive supply.
'The loss arising from decline in product prices far exceeded the gain generated by product price increases, which resulted in a reduction of sales revenue,' the company said.
The continuous energy price increases in electricity, coal, oil and water also crimped business earnings.
Faced with these difficulties, the company said it had come up with an eight-pronged measure to resolve the situation.
This included the adjustment of product mix to suit the market needs.