CHINA: Weiqiao Textile issues first-half profit warning
China's largest cotton textiles producer Weiqiao Textile has issued a first-half profit warning, blaming low cotton prices as well as weak demand.
The company said there would be "a significant decrease" in group profit for the six months to 30 June compared with the same period last year.
It added that as well as weak demand for textile products in domestic and overseas markets, low cotton prices had made it difficult to increase the price of cotton textiles.
But Weiqiao Textile said it had CNY2.8bn (US$440m) in cash and cash equivalents on its books and that its overall operations "remain sound and intact." Cotton yarn, grey fabric and denim sales volumes rose year-on-year to 31 May, it added, while inventory is lower than levels at 31 December 2011.
Falling demand in overseas markets pushed the company to a 90.3% drop in full-year profit last year to CNY246m (US$40m), while revenues were down 14.8% to CNY15.23bn.
Companies: Weiqiao Textile Company Limited
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