China Sunsine Chemical to record lower revenue, profit for FY2020 on Covid-19 impact

SPECIALITY rubber chemicals producer China Sunsine Chemical Holdings announced in a bourse filing late on Tuesday that the group is expected to record lower revenue and profit for FY2020 than it did for the preceding financial year ended Dec 31, 2019.

The company will announce its unaudited financial results for the six-month period ending June 30 by Aug 14.

The extent of the impact of Covid-19 on its financial performance for this year "cannot be fully determined at this juncture", said the group. Although its businesses in China have returned to work, many countries are only slowly beginning to ease lockdowns and re-open their economies. The situation remains fluid, the statement said.

As at March 31, the group had a bank and cash balance of 1.35 billion yuan (S$272 million) and no debt.

The group said it is committed to its original plans drawn up before the Covid-19 outbreak, and will continue to implement its expansion projects in phases.

The group believes that with the completion of these expansion projects, its market leadership position will be further strengthened.

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Since the start of the pandemic, the group has not implemented any job cuts across its businesses; all its employees have returned to work. It added that the group is also not in breach of any Covid-19 restrictions placed by China's central and local governments.

The group said that it produced and sold approximately 60,000 tons of rubber chemicals between January and May 2020, and that its production facilities are now running at 70-80 per cent utilisation rate due to lower demand from its customers, especially its overseas ones.

China Sunsine Chemical Holdings is not expecting any material defaults from customers.

"To cope with the current and possible long-term disruptions to its businesses, the group is taking active steps to focus on operational improvements, strengthening cash flow management and controlling cost," it said in the statement.