Yizheng Chemical Fibre, the world's fourth-largest polyester-maker, expects about 70 million yuan (about HK$65.3 million) in interest savings on an expansion programme due to government subsidies on technological-upgrade projects. Deputy-president Wang Shilin said the company planned to invest 770 million yuan in capacity-expansion projects that would be completed by next year. Half the investment would be financed by bank borrowings, with interest savings being achieved over a three-year loan period. The remaining investment cost would be funded internally. The H-share company on Friday reported a net profit of 227.52 million yuan in the first half compared with a net loss of 183.56 million yuan in the year-ago period. The company had a net loss of 174.72 million yuan last year. In the first half, the company booked an exceptional loss of 96.21 million yuan for write-offs of certain plant, machinery and other fixed assets during a review, which Mr Wang said had been completed. The company's Foshan plant earned a net profit of 10 million yuan in the period, the first since it was bought in 1995. The plant sustained an 87 million yuan full-year loss last year. Mr Wang said he did not expect rising crude-oil prices and thus raw material prices would have much impact on the company's profitability in the second half. He also said he did not expect crude-oil and raw-material prices to rise significantly in the rest of the year. Product prices also increased, partly because of a recovery in the mainland's textile industry, he said. The company's gross profit margin in the second half should not be lower than 24.4 per cent in the first half, Mr Wang said. This compared with a margin of 8 per cent in the first half last year and 17 per cent in the second half. The company's four main products had price increases of between 3.26 per cent and 15.27 per cent since June.