Red chip Onfem Holdings, ultimately owned by China National Non-ferrous Metals Industry Corp (CNNC), has seen annual net profit drop 12.24 per cent to $56.29 million. The decline came as Beijing announced CNNC was dissolved from Saturday, replaced by China National Non-ferrous Metals Industry Bureau under the State Economic and Trade Commission. Onfem has not mentioned the restructuring but the market was concerned as to how the overhaul would affect China Non-ferrous Metals (Holdings) Hong Kong, which owns Onfem and Oriental Metals (Holdings). CNNC was headed by Wu Jianchang, son-in-law of late patriarch Deng Xiaoping, until January, when he was replaced by trade commission vice-director Zhang Wule. Mr Zhang was named director of the new bureau last week. Onfem's net profit drop would have been steeper without a $35.38 million exceptional gain from compensation for a shortfall against guaranteed profit from acquired units and a write-back of revaluation deficit. In 1996 it had a $26.45 million exceptional gain. Onfem's profit was also lifted by share of profits of associates of $4.73 million, compared with losses of $15.41 million in 1996. During the period, sales tumbled 47.6 per cent to $1.83 billion, with operating profit before exceptional items falling 38.06 per cent to $73.11 million. Earnings per share dropped 21.62 per cent to 7.83 cents. A final dividend of two cents was recommended, bringing the year's total to 3.25 cents, down 35 per cent from a year ago. Managing director Jia Yuen said turnover was slashed by lower trading revenues after it sold its interest in Oriental Metals to China Non-ferrous Metals (Holdings) Hong Kong. Excluding Oriental Metals' contribution, Onfem's turnover and operating profit would have grown 53 per cent and 61 per cent from the previous year. The profit decline also came from the loss of its construction subsidiary Condo Group.