China’s Chitianhua 2010 profit falls 8.8% on high feedstock cost

12 April 2011 10:15  [Source: ICIS news]

GUANGZHOU (ICIS)--China’s Chitianhua posted a net profit of yuan (CNY) 125.3m ($19.2m) in 2010, down 8.8% from the previous year because of higher prices of feedstock natural gas,  the fertilizer producer said on Tuesday.

Its operating profit decreased by 13.1% to CNY145.1m even as operating revenue increased by 19.5% to CNY1.3bn, the company said in a statement.

Feedstock for fertilizer production was in short supply that Chitianhua was forced to shut down its 630,000 tonne/year urea plant for 87 days in 2010, while higher prices of the gas pushed up the company's costs drastically, the company said.

The company produced 523,900 tonnes of urea in 2010 and sold a total of 536,500 tonnes of the material, it said.

Chitianhua is targeting to produce 530,000 tonnes of urea, 190,000 tonnes of ammonia and 100,000 tonnes of dimethyl ether (DME) this year, said the company.

But overcapacity in the fertilizer market and strong natural gas prices would continue putting its operations under pressure this year, the company said.

($1 = CNY6.54)

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By: Fanny Zhang
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