China Sunsine Chemical reports improved Q1 performance despite China Covid control measures

SPECIALTY rubber chemicals producer China Sunsine Chemical Holdings announced Thursday (Apr 28) that the group’s financial performance for the first quarter ended March has improved, despite lower sales volumes due to Covid-19-related lockdowns in China.

The group said sales volume fell 11.3 per cent to 41,800 tonnes in Q1, as Covid control measures in Shanghai and other cities led to the restricted movement of goods and people.

“Trucks are not allowed to exit the highway, which has delayed the transportation of raw materials to factories and finished goods to customers. The tyre-makers also experienced lower production utilisation rate and lower profits due to these control measures,” China Sunsine Chemical said in a business update.

The group also partially attributed the decline in sales volume to the Winter Olympics and Chinese New Year during the quarter.

However, China Sunsine Chemical said its net profit rose 26 per cent to 157 million yuan (S$32.9 million) in Q1, as average selling prices surged due to an increase in raw material prices.

Overall average selling prices climbed 24.7 per cent, it added.

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As a result, gross profit margin increased 2.4 percentage points to 34 per cent for Q1 FY2022.

The group said it remains confident about its profitability in the next 12 months, as it seeks to improve its sales volume in FY2022 amid the ongoing Covid-19 outbreak and Ukraine-Russia conflict.

Shares of China Sunsine Chemical closed S$0.01 or 2.2 per cent lower at S$0.455 on Thursday, before the announcement.