SINGAPORE (April 27): China Sunsine Chemical Holdings, one of the largest producers of rubber accelerators in the world, reported earnings of RMB57.2 million ($11.6 million) for the first quarter ended March 31, nearly double from the RMB33.6 million posted in the same quarter a year ago.
Group revenue for the quarter grew 29% on-year to RMB574.6 million, backed by strong growth in sales volume and higher overall average selling price (ASP) for all products, which registered an increase both y-o-y and q-o-q due to the group passing on the increased costs in its raw material prices to its customers.
Sales volume from rubber accelerators, insoluble sulphur and anti-oxidants increased across the board, with higher demand for rubber chemicals products being driven by increased production by China’s tire-makers.
On the other hand, demand for insoluble sulphur and anti-oxidants grew as some of the group’s competitors’ productions were affected by the enforcement of stringent environmental protection regulations, says China Sunsine.
Gross profit rose 30% to RMB140 million in 1Q17, such that and gross profit margin for the quarter was maintained at 24.4%.
“International crude oil price volatility is causing fluctuation of our raw material prices. And more importantly, the regularity of environmental enforcement in China remains unabated, and environmental inspections are becoming more frequent. Whether on its own or taken together, these factors may affect our production in the future,” notes China Sunsine’s executive chairman, Xu Cheng Qiu, in a Thursday release.
“We will maintain our strategy of growing sales volume to stimulate higher production, thereby achieving economies of scale and greater competitiveness. I am confident of our performance and profitability for FY17,” he adds.
Shares of China Sunsine closed 3 cents higher at 76 cents on Thursday.
