FibreChem reports 5% growth in net profit

05 August 2008 05:04  [Source: ICIS news]

SINGAPORE (ICIS news)--China-based FibreChem Technologies reported late on Monday  a 5% year-on-year rise in second quarter net profit to Hongkong dollars (HKD) 151.4m ($19.4m) from HKD 144.3m.

“The group had done reasonably well in the first half of 2008, amidst signs of a possibly slowing fibre industry in China. The downward pressure on average selling prices for fibre products may take some time to ease off,” James Zhang, Executive Chairman, said in a statement.

The company recorded a 10% growth in revenue to HKD 505.8m from HKD 459.6m driven by its new 10,000 tonne/year bi-component long fibre production line that commenced operations in June 2007.

FibreChem’s net profit was boosted by exchange gains driven by foreign currency loans in light of the appreciating Chinese Yuan that also cushioned rising operational and other expenses, Zhang said.

Selling and distribution expenses grew a significant 84% due to increases in advertising budget and additional costs that was set aside for the establishment of new sales offices in Shanghai, Guangdong and Jiangsu.

Looking forward, FibreChem intends to explore new fibre products whilst actively growing its microfibre leather business in anticipation of the weakening of the Chinese fibre industry.

“We are confident that the steady investment in marketing and the strategic development of our various business segments will generate sustainable growth for the group,” Zhang said.

($1 = HKD 7.80)

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By: Bohan Loh
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