CHINA: Weiqiao H1 profit soars as costs fall
- H1 net profit up 393% to CNY266m (US$43.4m)
- Revenue down 13.1% to CNY6.702bn
- Gross profit margin 9%, up from 3.6%
Falling unit costs helped Weiqiao Textile Company to post significant increases in gross profit margin and net profit for the first half of the fiscal year.
The growth came despite a double-digit revenue decline in the six months to 30 June, brought about by falling sales of cotton yarn.
Weiqiao, China’s largest cotton textile producer, said cotton yarn production had risen by 15.5% to 238,000 tons in the period, with grey fabric production flat, and denim production falling by nearly 30%.
The company said increased profits had come from a decline in unit cost of sales, a rise in profit generated from the sale of electricity as coal prices fell, and the group’s reduced finance costs.
“Insufficient overseas demand, a slowdown in the growth in domestic demand, a gap between domestic and overseas cotton prices, and the increase in the production costs including labour cost were still the major issues that affected China’s textile industry during the period,” said Zhang Hongxia, Weiqiao chairman.
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China's largest cotton producer Weiqiao Textile Company has said it expects to record a "significant" increase in full-year net profit....
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