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Changjiang Fertilizer sinks deeper into the red for Q3, looking to diversify
CHANGJIANG Fertilizer Holdings reported on Monday that the group has sunk deeper into the red, with a net loss of 47.61 million yuan (S$10.1 million) for the third quarter ended Sept 30, 2014, compared to a net loss of 36.13 million yuan a year ago.
Loss per share stood at 13.23 fen, compared to a loss per share of 10.04 fen a year ago.
The Chinese fertilizer maker did not generate any revenue for the nine months to end-Sept due to farmers' increasing preference for compound fertilizers over traditional fertilizers.
"Thus, the production activities in all our three plants continued to be temporarily halted for the whole of the 9M2014 with no sales revenue generated as the weak demand could not satisfy the minimum threshold levels required for production to justify the operational costs incurred,'' Changjiang said.
Instead, it incurred 47.20 million yuan in general and administrative expenses in Q3. The increase was due mainly to the 13.4 million yuan allowance for impairment of trade receivables and the 22.1 million yuan allowance for impairment of advance to suppliers.
By the end of Sept, its cash and cash equivalent shrank to 6.58 million yuan, from 107.30 million yuan a year ago.
Changjiang said negotiations with the local governments on its Miluo and Xiangying plants are still ongoing. The two plants have received notifications from the government to cease their operations as the sites are targeted for city re-development.
On its prospect, Changjiang said the fertilizer industry continues to be depressed and is unlikely to improve for the rest of this year.
"As a result, the group is seeking suitable opportunities to diversify its business and will update shareholders of its future plans in due course,'' it said.
Changjiang resumed trading down one cent, or 25 per cent, at S$0.03 a share.