Jiutian Chemical Group posts 10% rise in Q3 net profit

CATALIST-listed Jiutian Chemical Group C8R posted a 10 per cent rise in net profit to RMB56.9 million (S$12 million) for its third quarter ended Sep 30, up from RMB51.9 million a year ago.

Revenue for the same period rose by 56 per cent to RMB416.7 million, from RMB267 million the year before.

In its business update on Wednesday (Nov 10), the company attributed the higher revenue to an increase in average sales prices of dimethylformamide (DMF) and methylamine, its main products. In Q3 FY2021, the average selling prices of DMF and methylamine rose by 118 per cent and 45 per cent year on year to RMB13,532 per tonne and RMB10,727 per tonne respectively.

The company said: "The increase in average product prices was mainly due to (an) increase in prices of raw materials and the continuing surge in demand for our main products from downstream customers, who in turn are experiencing strong growth in both local and export markets for their products."

Still, sales volume for DMF and methylamine fell by 8 and 4 per cent respectively in the same period, as operations were affected by severe flooding in Henan province in early July.

The company also said that soaring coal prices had increased the cost of methanol, liquid ammonia and industrial steam by 65 per cent, 65 per cent and 131 per cent respectively. These are key materials in the manufacturing of its products.

This resulted in a decline in gross profit margins for the quarter to 23 per cent from 34 per cent a year ago.

Shares of Jiutian Chemical closed flat at S$0.08 on Wednesday (Nov 10), before the business update was released.